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.
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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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.
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.
[According to the chart in this article,] all currencies are being debauched. The price of gold in each currency approximates a parabola, meaning the use of printing presses is accelerating. Each unit of currency is losing purchasing power at an increasing rate. The trend points to a worldwide currency collapse unless the creation of money stops. [Take a look!]. Words: 282
In an environment of ultra expansionary monetary policies…the long-term trend for gold is higher and as inflation surges, gold will go ballistic resulting in the Dow-Gold ratio touching one. [Let me explain why that will indeed be the case.] Words: 760
The Dow:Gold ratio is defined as the ratio of the price of the Dow Jones Industrial Average divided by the price of gold [or] how many ounces of gold it takes to buy the 30-stock Dow. The current Dow:Gold ratio of 8.5 is up 21.1% from its 17-year March 6, 2009 low of 7.0 and 81% below its 1999 peak of 44.77. [What does the future hold? Higher gold prices, lower stock prices or vice versa?] Words: 400
When it comes to investing in gold, investors often see the world in black and white. Some people have a deep, almost religious conviction that gold is a useless, barbarous relic with no yield and an asset no rational investor would ever want. Others love it, seeing it as the only asset that can offer protection from the coming financial catastrophe, which is always just around the corner. Our views are more nuanced and, we believe, provide a balanced framework for assessing value. Our bottom line: given current valuations and central bank policies, we see gold as a compelling inflation hedge and store of value that is potentially superior to fiat currencies. [Here are the details of our analyses.] Words: 1316
Some say that the gold price rises and falls, but they are grabbing the wrong end of the stick. It is the purchasing power of national currencies that rise and fall. Here is an analogy to make this point clear. When standing in a boat and looking at the shore, it is the boat (currencies) – and not the land (gold) – that is bobbing up and down. [Let me explain the value of gold further.] Words: 631
Several years, ago, the very savvy Richard Russell stated that the investment times were changing. He said that with huge debts everywhere, cash flow would be the most important issue for everybody going forward- for business, for investment, and for everyday life. He said that it was no longer a game of “Return on Capital”, but a need for “Return of Capital.” What Richard was saying was that good and consistent investment and income gains would be more difficult for a decade, or so, and that just keeping the same value of one’s savings would be an important goal.
The concept of “value” is extremely important, especially when Dollars are being printed aggressively. This is because the value of your Dollars is falling. Most people look at a Dollar and see a Dollar. They don’t understand that the worth of a Dollar can fall dramatically in times like today.