Why? According to the chart I made yesterday, gold prices reached a peak in 1980 or thereabouts. At that point, the Dow Jones was at its low point having been in a bear market for over a decade. So, if the economy was doing poorly, as indicated by the double digit inflation and double digit unemployment ( that was to follow shortly), and the gold prices; and the gold prices being equal roughly to the Dow, that condition should obtain today as well.
But the Dow today isn't in a bear market and is a bit overpriced. Also, there are those who say that gold is in a bubble. With gold at $1300 oz and the Dow at over 15k, there's a 10 to 1 ratio between the two. How can gold be in a bubble and the Dow is not?
As mentioned in an earlier post, the economic statistics are just as bad as they were in 1980. Maybe even worse. But the numbers are not reported the same way as they were in 1980. If the numbers were reported the same way, the numbers today would look like 1980 all over again.
How does the same report technique if used as in 1980 support a Dow at 15k and a gold price less than 10% of that when the two numbers were equal back then? The Dow should be lower or gold should be higher, or some combination of both. Or something is definitely out of whack.
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