DOW 50000 + in 20 years / Measured in Precious MetalsAssuming 4% annual at 25k, YOY growth, and we have price target of around 55 000 Dow Jones in 20 years (2038)
Dow measured in real commodities, like XAGUSD, and XAUUSD is very strong right now. One can interpret this chart two ways: First, measured in PM's the DOW has been in a downtrend since 1999 - 2000 and this rally is a in fact a bear market rally or ...
Second way, the Dow measured in PM's has been in an uptrend since 1980 and made a higher low in 2011 (5.5X higher or so).
These two views ... present far different price expectations. I'll provide an example of each.
First, the uptrend view. Assume it takes 27 - 30 years from prior higher low (2011 > 2038 - 2040) and apply the same multiple from 1980 to 2011 and we get DJI/XAUUSD ratio of 45. Applying the multiple of Silver and we get DJI/XAUUSD ratio of around 3000. This implies a price of around a $1000 per ounce of gold, and $18.50 per ounce of silver.
Second, the downtrend view. DJI/XAGUSD declined 89% from 1999 - 2011 (2500 - 275) and DJI/XAUUSD declined around 83% (44 - 7.5). Assuming that the silver ratio peaks at 1500, and the gold ratio peaks at 20 and applying the same percentage declines implies these ratios.
DJI/XAGUSD = 165
DJI/XAUUSD = 3.5
This implies a price around $330 Silver, and 15000 Gold.
Please leave your thoughts and comments below.
