Dow/Gold Ratio (plus Dow)

Fascinating chart from David Singer; I am still struggling to decipher just what it means.

The Bar Chart is  the ratio of Dow Industrials to Gold; it asks, how much Dow does an ounce of Gold buy?  The line on the chart is the Dow.

It makes some sense that there is a parallel between Gold and the Dow, given the impact of inflation and geopolitical risks on both.

The divergence since 2003 — when interest rates were slashed to generational lows, and the War in Iraq began.

Gold_dow

If anyone has another theory or explanation, I am all ears . . .

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