3 scenarios from where we are today:
- With the debasement of fiat currencies worldwide, the Dow may continue to head higher (With all of those paper dollars) and Gold will out pace it to eventually hit the 1:1 ratio.
- The Dow can remain in a trading range around the 10,000 area and Gold will continue to rise to reach that level for the 1:1 ratio.
- The Dow can decline and Gold will increase to reach the 1:1 ratio. This scenario has the highest probability of happening. At a minimum, Gold will reach $5000 and the Dow will drop to 5000.
These are two signals that the Gold and Silver markets have reached their zenith and investors will need to make a decision on what to do with their precious metals. In 1980, both Gold and Silver declined rapidly after the peak. Rob McEwen has mentioned that he will be starting to sell Gold when the Dow Gold ratio is 2:1, then take the proceeds and invest in another undervalued asset like land or real estate.
We are a few years away from the above scenario happening, but it's always good to have a clear EXIT STRATEGY on EVERY INVESTMENT that you have. Remember the saying in the stock market: BULLS make money, BEARS make money and PIGS get slaughtered.