Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Dow Jones 22,000 vs Gold $1,500

Stock-Markets / US Stock Markets Oct 16, 2007 - 02:06 PM GMT

By: Dudley_Baker

Stock-Markets Remember a few years ago when several books were published with titles, like, Dow 40,000, Dow 22,000, Dow 36,000, Dow 39,000. This was in late 1999 and early 2000 at the then top of the internet bubble and with the Nasdaq and the Dow hitting highs. Exuberance was everywhere.


At that time, many of us dismissed these forecast as they were largely based upon a growing U.S. economy propelled by the demographics of the coming baby boomer generation. The theme was the peak would arrive in 2009 or so.

What then seemed like a ‘fantasy' or pipe dream forecast of a Dow at 22,000, much less 40,000 is now becoming a more realistic projection but for perhaps different reasons.

Yes, there is growth albeit, slow growth in the overall U.S. economy. But the growth in other parts of the world, China , India , Russia , Brazil and even Mexico are driving the world's economy. So, what does this have to do with a Dow 22,000 or higher?

It's all about the U.S. dollar. We don't recall those forecasting a Dow 22,000 envisioning a declining U.S. dollar.

What we are currently witnessing is an earnings growth in the large multi national U.S. corporations. This growth is coming at the expense of the declining U.S. dollar. As the U.S. dollar declines the exports of these corporations are increasing and thus the earnings will be rising.

Some analysts are predicting the U.S. dollar still needs to fall and 1/3 in value from current levels, to make the U.S. more competitive and help with the balance of trade deficit. This would produce more earning for these U. S. corporations in the coming months ahead.

With this backdrop of increasing earning we can see the potential for the Dow and the S&P 500 to increase dramatically within the next 18 months. Can the Dow reach 22,000 or higher? We continue to think not. But investors must remember the Dow while currently at around 14,000, is in a bull market only if measured in U.S. dollars. Denominate the Dow in virtually any other currency or in gold and you get an entirely different picture.

We believe the great trap that U.S. investors do not see is that a Dow 22000 with come only with a U.S. dollar at substantially lower levels. Investors with feel rich and exuberate with a Dow 22,000 only to realize when they sell that their U.S. dollars are virtually worthless. U.S. investors for the most part do not think in terms of the macro picture. The Euro, Canadian dollar and gold are foreign concepts. By the time U.S. investors wake up the game will be over. Their retirement funds will be virtually worthless and denominated in a greatly depreciated currency rivaling that of a third world country.

Got Gold? We do!

With the declining U.S. dollar, gold, silver and virtually all natural resources and commodities should continue to rise dramatically. Thus, we see incredible value in the shares and long term warrants of those companies in the natural resource and commodities sector. One leading analyst recently has written that he sees the possibility of a blow-off top in gold taking us up to the $1,500 level. When? Not 5 years from now, not 2 years, but within the coming April – June 2008 timeframe.

It will be an incredible ride if this forecast becomes really. The shares and long-term warrants will explode in value. So we will stick to the gold market not to the Dow for our investments and will be greatly rewarded for our decision.

For those readers interested in education and information on warrants, we encourage you to visit our website where you can now signup to receive our Free Saturday newsletter which is appropriately titled, The Warrant Report .

Dudley Pierce Baker
Guadalajara/Ajijic, México
Email: info@preciousmetalswarrants.com
Website: PreciousMetalsWarrants

Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much, much more. We do not make any specific recommendations in our service. We do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders.

Disclaimer/Disclosure Statement:PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

Dudley Pierce Baker Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules