Here's The Invisible Stock Market Crash Only Gold Hoarders Can See

[MNeagle]

Here's The Invisible Stock Market Crash Only Gold Hoarders Can See


Dollars, euros, and yen are all just currencies you can price any asset in. Everything is cheap or expensive relative to the currency you hold.

Thus if gold is truly a world currency, then the S&P 500 index of U.S. stocks is dirt cheap when priced in it. For every ounce of gold, you can now buy more than five times the amount of stocks you could have ten years ago, as shown below.

The tricky question is where this stocks-to-gold ratio will go over the next ten years:

http://static.businessinsider.com/image/4ca373147f8b9a6219f50300/chart-of-the-day-sp-500-in-gold-1971-2010-sept-2010.jpg

Read more: http://www.businessinsider.com/chart-of-the-day-sp-500-gold-2010-9#ixzz10waAwLJZ








Read more: http://www.businessinsider.com/chart-of-the-day-sp-500-gold-2010-9#ixzz10wZyPs4c

[Ponce]

I trust the Canadians dollars more than the Yen.............the Yen is composed of IOU's from the US and from things that they might sell in the future but the canadan dollar if from things that they have here and now .......like oil, cattle, food and a lot more.

[Gaillo]

That chart illustrates something VERY clearly... Gold is not getting more expensive - rather, dollars (and the "industries" backing the dollar) are getting cheaper!

(It also shows that 9/11 was the turning point...)

[Neuro]

That chart illustrates something VERY clearly... Gold is not getting more expensive - rather, dollars (and the "industries" backing the dollar) are getting cheaper!

(It also shows that 9/11 was the turning point...)
Exactly, the stock market has declined about 85% in real money terms since 9/11-2001

[Heimdhal]

its also intresting to see that it did not recover its pre '71 recession numbers until sometime into the early '90s.

Same thing happened with the crash of '29. The DJIA did not recover its pre '29 numbers until '54 IRRC. And of course when you factor in the inflation and government growth in that time frame, you have to figure it likley didnt recover at all.

[Neuro]

its also intresting to see that it did not recover its pre '71 recession numbers until sometime into the early '90s.

Same thing happened with the crash of '29. The DJIA did not recover its pre '29 numbers until '54 IRRC. And of course when you factor in the inflation and government growth in that time frame, you have to figure it likley didnt recover at all.
Further most of the stocks that made up DOW JONES index in 1929 was probably gone in 1954, bankrupt or performing so badly that it was kicked out of the index. I think the gold price would be around 6-7k today if it had kept up with real inflation rate since its peak in 1980, silver would be at 4-500 dollars/ounce...