Baires

A Dow:Gold ratio approximating 1 is likely our target price for gold. All events will overshoot the market value as the public wants to get in on the game near what is recognized afterwards as the high. The POG will likely pull-back and settle in at a fair value depending on what is backing the currency we are doing the measurement in.

Here are a few possibilities:

If we continue on with Fiat money then we could see a repeat of 1980-2000 where the POG drops as the supply is increased until we have a low in production and we start again. (after the experience of the recent past it is difficult to imagine continuing with Fiat)

or

Currencies are tied to tangable assets like Gold. Monetary policy is restrained by the annual production of gold. The POG is stable and possibly fixed in a world currency.

There are likey many more possibilities. The big question for us is where do we invest after the peak, if former possibility occurs? Could it be land and income real estate?

If the later occurs, then we would have many good options, I believe, as the currency would be stable.

The actual peak POG is almost impossible to pin down as who knows the depreciated value of the currency we are measuring it in.

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