Sunday, September 28, 2008

Doug Casey On Gold

“Gold is grossly undervalued compared to the stock market,” notes our colleague Doug Casey. Doug sent over this chart today -- a startling example of the potential upside for gold:

“Since 1975, the ratio between the 1-ounce price of gold and the S&P 500 has averaged just over 1.3. Even at today’s $900 gold price, the ratio remains beneath its historical average, and exponentially below the levels of the last major gold bull run, in 1980, when rampant inflation and a declining dollar plagued the U.S. economy. Sound familiar?”

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