Through History With the Dow & Gold

It’s not analysis so much as it’s just some fun with charts and time frames

Come back with me to a time when Nixon severed the final ties that the US dollar had to the sound monetary anchor, gold. Look at how handily paper stocks have beaten the pulp out of the pretty rock. It’s not even close. Stocks benefit from successful inflationary operations better than gold does.

dow gold

Dialing in to the best of the stock bull market and worst of the gold bear market we see the same story. It’s the stock market, baby!

But wait, in 2001 Alan Greenspan blew a gasket on the money supply and look what happened. Gold ramped in response.

Gold also ramped at the big money supply crank job that got sprayed into the markets in Q4 2008 and 2009. Ah, but then Ben ‘Big Brain’ Bernanke got to work in 2011 and cooked up Operation Twist (which by definition flatted the yield curve and created a Goldlocks boom out of thin air and by will of man). Goodbye gold; hello stocks (again).

A closer look at the post-Op/Twist indignities.

But since the 2015 bottom in gold there’s been a catch up move.

And then there’s 2020. Gold had already been on a nice track, but the economic destruction that brought on the monetary Howitzers has accelerated the process.

They’re at $7 Trillion and counting, although they’ve eased up lately, letting Powell’s jawbone do the work for now. I wonder if stock market players will start to catch on. I guess it depends on who’s programming the algos.

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