As the saga unfolds I will be watching and adding to my position if we see a bigger "hit." I'm just afraid that a reversal at this juncture would be somewhat anticlimactic. This is only my opinion, based on 17 years of gold's past performance and my own contrarian views.
Best Regards and Great Trading,
NIner
Do I think we are in for a major market reversal? Yes. I'm not an economist, or a serious student thereof, but I see too many unsettling things going on just in my daily life. I get 3 phone calls a week offering credit cards, with incentives. I get another call every other week from a bank or financial insitution offering home equity loans, no credit approval required. Last week while surfing, I saw Louis Ruckmucker interviewing the manager of a Young Investors Fund -- come on kiddies, break open your piggy banks, and let me show you how to make real money. The most impressive chart I saw from Ross Perot was the one that showed manufacturing jobs going steadily down, and people getting government paychecks going up - now exceeding manufacturing jobs by far and still rising! Unbelievable! We have an immoral, unethical, lying con man in the white house whose popularity has never been higher. Both political parties are run by a bunch of hacks in the pockets of various special interest groups, who are selling our country down the river, and no relief is in sight. The term "forward feedback" refers to an unstable situation that feeds on itself and self destructs. Clinton could never been elected unless there were enough votes from people getting government paychecks, getting public handouts, getting pork from a corrupt government, and/or people so mindless that they can be easily infuenced by propaganda. Once you reach this point, and this group has enough votes, we have reached a point where forward feedback is in effect. We are there, or nearly there. This situation can only be reversed by the effects of severe pain. It is inevitable, and I am not looking forward to it!
Can the DOW drop below 4500 while this is going on. I think Prechter's book At the Crest of the Tidal Wave was written when the DOW was around that level. I think it is possible and likely. When is another question.
In the meantime, I will try to keep my assets and my family safe. I will learn from RJ and invest with the trends, not try to fight them, and I will count on you and others at Kitco to help spot changes in the trends. I think we are approaching a very brutal, volitile market. Opportunities to make or lose a lot of money. Best of luck to all of you.
I think it is the same in the global environment. Without such a a strong, dangerous competitor, we get leaders like Clinton and the rest of the Washington mush-for-lunch bunch. Our military becomes weak and demoralized. We lose core competance. We accept poor and ineffective schooling of our children, and deemphasize the basic math, engineering, and science skills that are necessary to keep us globally competitive.
Short of an actual war, I think having a strong economic and military power such as China is becoming can do us a lot of good.
If the cyclical nature of the DOW adjusted chart is extended, and a "grinding bear market" is assumed, as opposed to a crash, the DOW would hit bottom sometime around the year 2013, at a level of DOW 2000. Looking again at your ratio chart, the bottoms are roughly at a ratio of 2. ( I think 1980 was an overshoot ) . With DOW at 2000 and a ratio of 2, gold would be at $1000.
Is this exercise of any value? Some I think -- if you place a value on history. For instance, I was surprised that the market could drop by more than 50%, and gold could still be in the low $400's and still be consistant with historical DOW/gold ratios.
jgkljalf - Since Vashon is nearer Seattle and a ferry comute is possible, I would assume it has long ago experienced the price appreciation that is now working it's way up Whidbey. I don't have any real information for you.
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The Gippa guy and dissa Busha guy; they two bigga assaholes, we no lika here in Cortino.