tag:blogger.com,1999:blog-53246864840716464.post4161000921592503400..comments2024-02-29T00:46:38.800-08:00Comments on Washingtons Blog: Marc Faber:"One Day the Price of Gold Will Be Higher than the Dow Jones."Unknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-53246864840716464.post-41170835652476078802009-10-14T09:47:22.857-07:002009-10-14T09:47:22.857-07:00Hello,
Just curious, when I look at the chart you...Hello,<br /><br />Just curious, when I look at the chart you cite, it seems like the long term trend (green band) has been to move away from a gold/dow ratio of 1:1 - with only one example of a large move outside of this band. So how in the heck does this chart support your thesis of a 1:1 ratio? If anything it is saying that historically it should bottom out around 10:1 or at worst 5:1, right? Even if it were a 1-2 standard deviation move to the downside it would not be able to overcome the logarithmic nature of the longer term trend to reach 1:1. Just reading the graph...<br /><br />What you fail to explain is why the longer term is a logarithmic move in the opposite direction of what you are espousing. Why, over time, is gold becoming less and less valuable relative to the DOW? <br /><br />Finally, what is the math you chose to select a target ratio of 1:1? Because Faber said so?Matthew Stonenoreply@blogger.com