Tuesday , 19 September 2017


What Gold Is Telling Us About Stocks & What We Should Do As a Result

If you believe, as I do, that gold is a solid way to “price” other assets because of its characteristics of being rare and stable in quantity – then the simplest way to profit from this trend is to wait for it to reverse – and when it turns around, sell gold and buy stocks. [Let me explain further.] Words: 431

So says Kevin McElroy (www.wyattresearch.com) in edited excerpts from his original article* entitled A Shocking Truth that Gold Can Tell Us about Stocks.

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.

McElroy goes on to say, in part:

…Very little gold gets mined every year, at least in comparison to the “above-ground” supply, so it’s a stable gauge for measuring the price of nearly anything else. It’s like a ruler that stays about the same length – while everything else shrinks and grows at much faster rates of change….

Unlike gold, the amount of stocks and the value of each stock can change massively from one year to the next but, conversely, there’s about the same amount of gold today as there was 90 years ago. A little more, but not much, so forget about the dollar as a way to measure and account for stocks. The dollar is like a ruler that shrinks 2-5% every year on average – so at best, it’s useful for a few months at a time as a true gauge. At worst, you shouldn’t trust it at all. [Read: This Chart Proves That Your Currency Is Being Debauched At An Accelerating (Parabolic) Rate! Got Gold?]

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Right now, gold is telling us one thing about stocks – namely that they’re getting cheaper by the year.

You can see from the  chart above that, priced in gold, stocks are as cheap as they were in the early 1990s – and also that stocks are in a strongly sustained down trend. In essence, every ounce of gold buys about 7 units of the DOW and, according to this ratio, we might expect stocks to resume an uptrend once the ratio gets below 5. [Read: Gold to Go Ballistic Causing the Dow-Gold Ratio to Ultimately Reach 1:1 – Here’s Why and What Does the Future Hold for the Dow:Gold Ratio?]

If you believe (as I do) that gold is a solid way to “price” other assets because of its characteristics of being rare and stable in quantity – then the simplest way to profit from this trend is to wait for it to reverse – and when it turns around, sell gold and buy stocks. I know this “plan” is easier said than done but the only quantity that’s significantly rarer than gold in this market is patience.

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Conclusion

Therefore, if you have the patience to wait for this trend to play out, I believe you’ll maximize your gains in gold, and you’ll be able to buy stocks at multi-decade low prices. It’s what I plan to do.

*http://www.wyattresearch.com/article/a-shocking-truth-that-gold-can-tell-us-about-stocks/29007

Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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gold-bars

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