Loading ...I’m going to go out on my charlatan limb and revue how utterly insane the paper vs. precious metal markets have become. Anybody clamoring about gold being grossly overvalued right now should consider these FACTS:
* The gold/Dow ratio is currently 15.30–1. As we know it has been as low as 1–1, and even more recently as low as 6–1. At 6–1 gold would be $3,000, and at a 1–1 ratio gold would be $18,000.
* The silver/gold ratio is currently 74-1. Historic ratios show 16-1 is closer to a fair ratio when mining costs are considered. At 16-1 silver should be $73.10. If gold were $3,000 silver would be $187.50. If gold were $18,000 silver would be $1,125 an ounce at its historic 16-1 ratio, very close to the current price of gold.
* The corn/Dow ratio is currently 4,639/1. Up to the 1980’s the ratio was closer to 500-1. One Dow unit will currently buy 4,639 bushels of corn, or approximately the entire yield for 27 acres.
* The lumber/Dow ratio is currently 63/1. Up to the 1980’s it had been between 10-1 and 4-1. One Dow unit will currently buy 63,000 board feet of SPF framing lumber, or 2 entire truckloads.
* The hog/Dow ratio is currently 27,692/1. A range of 5,000/1 to 12,000/1 has been the norm. One Dow unit will currently buy 27,692 pounds of pork, or 13.85 tons.
Never in history has so much worthless paper bought so much fruit of hard labor. Charles Ponzi himself would blush at the utter mania of derivative-based manipulation. I’ll leave it up to history, and not Traitor Dan to decide who the charlatans were. Suffice to say with gold at $1,170 an ounce the only “quacks” to be found are coming from ostriches so desperate to be heard.