Thursday, July 1, 2010

Despite Gold Quadrupling Since The 1982 Low...'s "capitalization" as compared with paper in the form of equities and fixed-income products is way below what it was in 1982. The big gain was in the equities category.

That drop is largely reflective of the 1982-'00 bull market in equities. The Dow is still way above where it was in '82. Believe it or not, there were cheers when the Dow made it above 1000 - yes, one thousand - in 1983.

The only time when the Dow/gold ratio ever sunk below one in the last hundred years was in early 1980, at gold's peak. This chart, from a article on April 29th, 2009, shows another time when the ratio hit one:

Right now, as a ratio chart shows, the ratio is around 7.7. It got as high as 10 when the Dow peaked.

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