Dow-to-Gold Ratio Tells the Whole Economic Story

LONDON, ENGLAND – In the fall of 2018, the Dow-to-Gold ratio started falling… for the first time in seven years.

Once the Dow-to-Gold ratio gets in motion, it tends to stay in motion. Its drop in 2018 implied to me that gold would start outperforming the stock market… possibly for as much as the next five or 10 years.

I immediately drained my bank and retirement accounts and put everything into gold and silver. Then, I started nagging my friends and family to do the same.

Finally, I approached Bill Bonner and his publisher, Amber Mason. I asked them if I could write to warn you about this, too. They agreed…

The Whole Story

The chart below tells the whole story. It shows the Dow-to-Gold ratio going back 120 years.

Notice how the ratio trends, moving in big, clear, predictable waves. Notice how it peaked in 1999 at 41, and how it’s been falling ever since…

Notice how the primary trend got interrupted in 2011, and the Dow-to-Gold ratio rebounded…

And finally, notice how the ratio peaked in the fall of 2018 at 22.36. (That’s why, as the chart shows, 22.36 is my stop loss for the trade. It’s where the Dow-to-Gold ratio makes a new 14-year high and invalidates the downtrend.)

My hypothesis is that the Dow-to-Gold ratio is now back on its way down… to a level somewhere below 5. Bill calls this its “rendezvous with destiny.”

I will hold my gold until then, at which point I’ll sell it all and invest the proceeds into the stock market.

Specifically, I will buy what I call “dividend aristocrats.” These are companies like Coca-Cola, Johnson & Johnson, AT&T, etc. They have decades-long track records of relentlessly raising their dividends.

There are no better passive investments than stocks like these.

Anyway, that’s all in the future. For now, I’m keeping an eye on the Dow-to-Gold ratio. It stands at 18.8 today.

– Tom Dyson

P.S. I could be wrong about all this. The waves could be just a lucky pattern, and there will be no “rendezvous with destiny” below 5. But I don’t think so.

One look at The Wall Street Journal provides all the evidence I need – insane government deficits, central banks around the world competing to debase their currencies, global growth turning negative, stock markets near all-time highs, and a near-universal faith in central bank activism.

It’s a perfect recipe for a much lower Dow-to-Gold ratio. Ignore this chart at your peril.

Maria’s Note: “Mark, I’ve found the perfect guy. He’s been working in finance since he was a teenager. He’s run hedge funds… He’s gone broke… And he’s made a couple of fortunes…”

Maria Bonaventura here, managing editor of the Postcards. The note above is how Tom first introduced Teeka Tiwari to his Palm Beach Research Group cofounder, Mark Ford. That was back in 2015…

Today, Teeka heads up one of the most successful cryptocurrency advisories in America – Palm Beach Confidential. His top crypto recommendations there are up 1,501%… 1,799%… even 7,880% in less than four years.

And now, Teeka has his eye on a new market niche… one that, until now, was reserved for the ultra-rich. This opportunity is closing soon, so we wanted to make sure you saw it ASAP…

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By Teeka Tiwari, Editor, Palm Beach Venture

In July 2019, I told my readers it was time to get into pre-IPO (private) markets. And as I predicted, we’re now seeing a tidal wave of money ready to come into this space.

According to capital market company Preqin, private equity firms are sitting on a record $1.5 trillion in cash. That’s more than double the dry powder they had five years ago.

And they’re ready to burn through it. After we crunched the numbers, it’s easy to see why…

Cambridge Associates found that over the last 20 years, the U.S. Venture Capital – Early Stage Index returned an average of 86.1% per year. In contrast, the S&P 500 Index returned an average of just 6% per year.

That means “private” market investing made almost 15 times the return of “public” market investing over the last two decades.

And the gap is only going to widen…

Research firm McKinsey & Company reports private equity investments have grown sevenfold since 2002… twice as fast as global public equities. And I expect that trend to continue.

You see, private firms don’t need public money anymore… except when they’re ready to dump their shares on ordinary investors.

Take Uber, for example. Insiders got pre-IPO shares for pennies. And when it went public last year with a valuation of $82 billion… they made out like bandits.

Some of them made gains as high as 64,200% on IPO day (that is, on the day Uber went public). Public investors? They haven’t made a dime off Uber yet.

That’s why it’s essential that you get some exposure to private equities today – especially when we’re about to see an IPO boom like no other before…

I don’t want you to be left with Wall Street’s table scraps. To truly make windfall gains, you need to invest in private companies before they go public… like the venture capitalists do.

And for the first time ever, I’ve found a way for you to be in on a pre-IPO deal with a billionaire… before it lists on the Nasdaq in 2020.

This is my No. 1 wealth-building opportunity of the year. And you just need a $250 stake to get in.

But you must act soon. Space is limited. And this “sweetheart” deal (you can get shares for just 50 cents) closes forever at the end of the month. To learn more, click right here.

– Teeka Tiwari

P.S. Already, this company is drawing so much interest from heavy hitters… Global corporations are trying to acquire it before it goes public. So don’t delay. Learn how you can get in on this deal for as little as $250 right here.

Readers write in about Tom’s struggles with depression… and his re-marriage to Kate…

Reader comment: I really think you should stop mentioning anything about suicide in your articles, even if it is about your past mode. Especially, words like,"…I felt it would be better for Kate and my children…" You know, words have power to linger in life, not just yours but others as well. Please don’t be stupid to say that you being gone is better for your family. Of course your children want to be with you.

I, too, struggled with thoughts of suicide at times when things were terribly difficult. This is not uncommon among fathers. But, don’t take the easy way out. In other words, don’t be a coward. Let’s just do our best.

You and I are in much better positions than the majority of fathers on the earth. You have the luxury of traveling the world, you’ve had the luxury of venturing out after quitting your regular job. I personally know many fathers who struggle making ends meet, yet they take it in stride on a daily basis, and do their best to share their love with their children and wife.

Reader comment: Godspeed! Great news on the plans for marriage. Your children are the true beneficiaries.

As always, please keep sending your questions and comments to us at [email protected]. We read every message you send in.