November 9, 2007
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AN UNUSUAL CHART, AN UNUSUAL UPTREND
Our chart today is unusual. It's not focused on one particular asset, as we usually do, but instead it looks at an unbelievable strong "ratio" shaping the world...
The ratio is the price of gold vs. the share price of Nordstrom, one of America's largest high-end retailers. Gold represents timeless, real wealth. Nordstrom represents the desire to spend $100 on a shirt. For most of this decade, credit-fueled materialism trumped the price of gold... and Nordstrom shares rose much higher than gold.
Now that folks are realizing the world isn't so stable and safe, gold is absolutely soaring against mortgages, Hummers, flat-screen TVs, stocks, clothing, motorcycles, and boats. You can see this outperformance by the rising trendline below. The price of gold is rising, and the price of Nordstrom stock is falling.
We're not picking on Nordstrom. Everybody likes to blow a few bucks at the mall. We could display the ratio of gold vs. Harley-Davidson, Starbucks, Pool Corporation, or Brunswick. The picture is the same: Real money is becoming worth a great deal more than stuff that will end up in a landfill.
- Brian Hunt
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