Gold is coming into the monetary system rather than moving away from it out of absolute necessity. Confidence in paper currency will soon evaporate. Worldwide currency wars assure this outcome.

Gold's coming $ price value will therefore be much more closely related to the amount of currency in the system (worldwide) than it will be to what the Dow stock index is doing.

Massive amounts of money have been (and continue to be) introduced into the system but have not gotten out into the hands of the spending populace; that is why we do not see what people call inflation (the rise of prices). The inflation (the rise in the amount of currency) has already taken place but its effect has been dampened and hidden due to decreased monetary velocity. In spite of the huge amounts of currency created; the velocity of money has slowed down as everyone knows something is afoot and holds their extra money rather than spending and borrowing yet more. Velocity has slowed and velocity relative to currency supply has hugely slowed.

Eventually all this will be known by even the slower ones of the populace and the monetary velocity will rise perhaps beyond normal creating a serious inflation (i.e. continued currency increase combined with an increase in monetary velocity). Then gold will attain the higher valuations in terms of currency the gold crowd anticipates. Since there is abundant currency around and increased velocity will eventually come, one could/should expect the stock market to go up, not collapse.

It is likely the Dow/gold ratio will attain to 1:1 yet again but at a much higher level not at a lower level. This is just my viewpoint. but I am firmly set in it and believe I have literally thousands of years of history backing my position.

P.