• 270 days Could Crypto Overtake Traditional Investment?
  • 275 days Americans Still Quitting Jobs At Record Pace
  • 277 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 280 days Is The Dollar Too Strong?
  • 280 days Big Tech Disappoints Investors on Earnings Calls
  • 281 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 283 days China Is Quietly Trying To Distance Itself From Russia
  • 283 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 287 days Crypto Investors Won Big In 2021
  • 287 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 288 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 290 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 291 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 294 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 295 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 295 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 297 days Are NFTs About To Take Over Gaming?
  • 298 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 301 days What’s Causing Inflation In The United States?
  • 302 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Joe and Suzie on Gold's Terms

As a general rule, the most successful man in life is the man who has the best information

The Dow on Gold's terms:

  • During January 2000 gold traded at an average price of $284.32
  • January 2000 the Dow was 10,900
  • 10,900/$284.32 per ounce = 38.33 gold ounces to buy the Dow

Today gold is trading at $1570.90 while the Dow Jones (DJIA) continues to break records, up another 30 points as I write to 14,284.

14,284/1570.90 = 9.09 ozs of gold to buy the Dow today.

38.33/9.09 = 4.2

Gold Trendline


The Dow on Silver's terms:

  • During January 2000 silver averaged $4.95 oz
  • January 2000 the Dow was 10,900
  • 10,900/$4.95 per ounce = 2202 silver ounces to buy the Dow

Today silver is trading at $28.62, the Dow is 14,284.

14,284/28.62 = 499 ozs silver to buy the Dow.

2202/499 = 4.4

Silver Trendline

The Dow has gone up roughly, and only, 3400 points since January 2000.

Gold, during the same period, has gone from an average of $284 to $1570.90 ($1570.90/$284 = 5.5x) while silver has gone from an average of $4.95 to $28.62 ($28.62/$4.95 = 5.7x) per oz.

In January 2000 the gold/silver ratio was $284.32/$4.95 = 57.43

Today, as I calculate these numbers, gold is $1570.90 oz while silver is $28.62 oz for a gold/silver ratio of 54.88.

Silver, a.k.a. 'poor man's gold' trades in lockstep with gold - from a ratio of 57.4 in 2000 to a ratio of 54.8 today some 13 years later who can argue?


Joe and Suzie on Gold's Terms

We've seen how gold and silver are doing relative to each other and the Dow. How is Joe & Suzie Average making out on gold's terms? Let's take a look at housing and wages...

Shiller US Home Price Index in Gold

Today's home prices are lower than they were during the Great Depression and are approaching their all-time lows.

"At first, the drop in the dollar simply offset the apparent rise in home prices, and prices in gold worked sideways until 2006. But when home prices began to fall in dollar terms, and dollars were themselves falling in value, the double-whammy pushed true home prices down to levels not seen since the late 1980s. In fact, they set a new record, the lowest level since the index was first published. This means that most homes purchased in the last 20 years are now worth less than the original purchase price, even if they show gains of 100%, 200%, or more, in dollar terms." ~ pricedingold.com

The average U.S. worker earned $13.75 an hour in January of 2000. As we already know the price of an ounce of gold averaged $284.

The average worker would have had to work 20.65 hours ($284/$13.75) to buy an oz of gold in January, 2000.

Today the average U.S. workers wage is $19.77 and gold is $1570.90 oz - the average working Joe/Suzie would have to work 79.45 hours to buy an oz.

Consider:

  • Global conflicts are intensifying and raising already considerable tension levels.
  • Zero interest rates, global quantitative easing and escalating currency wars - an international race to worthless that ends with everyone a loser and leads to a rise in protectionism and future trade wars

After mulling over all that's happening in the world today ask yourself "what chance does Joe and Suzie have of buying gold and silver cheaper in the future than now?"


Conclusion

Buying some gold and silver should be on everyone's radar screens. Is it on your screen?

If not, maybe buying either, or a bit of both, should be.

 

Back to homepage

Leave a comment

Leave a comment