more of Bill Bonner ... quoting

But how much would people pay for a gallon of gasoline? Well, let’s see...let’s assume that gold has done a fair job as real money, of holding its purchasing power steady. Back in the early ’70s you could have bought 160 gallons of gas with a single ounce of gold. And today? At $1,800 an ounce, and gasoline at $4, you can buy 450 gallons. It’s as if the price of gasoline had fallen to about 10 cents a gallon!

Hmmm....go figure.

Either gasoline is too cheap. Or gold is too expensive. If we were a trader we’d short the latter and go long on the former.

And since we’re always just guessing, we’ll take a guess as to what this means...

Gasoline is weak because the economy is fundamentally weak. Gold is high because Richard Nixon destroyed the integrity of the dollar, the US economy, and the world’s monetary system. Each of these trends will have to play itself out. In the meantime, gasoline...and/or gold...may need a little adjustment.

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