The chart below shows the Dow Jones versus Gold going all the way back to 1980:
If the chart above is rising, then that means that stocks are outperforming gold. And that was the case during the great bull market lasting from the early 1980's to around the year 2000. The way I see it, this was a time of real prosperity in America.
If the chart above is falling, then that means gold is outperforming stocks, which has been the case from the year 2000 to this moment of time, right now. Arguably, this was a time of phoney growth and a bubble economy, and certainly a lost decade for stocks.
The reason I post this chart now is that it appears that the ratio is in the beginning stages of a major change of trend, as evidenced by the breaking of a downward sloping trend line. Hypothetically, if the ratio rose to 20, then that could mean $1,000 for an ounce of gold and Dow 20,000.
While it is not my intention to make any predictions, I do think that, objectively, stocks are in a major bull market, while precious metals are currently in a bear market.
