Matterhorn Asset Management sees Dow losing 97 percent against gold

Citing the removal of the gold stand by Nixon, Matterhorn Asset Management sees Dow losing 97 percent against gold.

It sees the final step of the removing the gold standard in the U.S. as the key reasoning behind the assertion. It allowed the U.S. government to create unlimited credit and money.

The resultant credit expansion around the world has been unprecedented.

In the U.S. alone it has jumped from $1.5 trillion to approximately $70 trillion.

For that reason gold will continue to be a store of wealth in the years ahead, protecting the purchasing power of those holding it, as it has for thousands of years.

Matterhorn sees it vastly outperforming most asset classes going forward, including stocks, bonds and real estate.

It sees the Dow being overbought by the most it has in about 60 years, with gold and silver being artificially depressed at this time.

From 1999 to 2011 the Dow/Gold ratio plummeted by 87 percent. Even with a weak correction the ratio is still down 60 percent since 1999.

The current correction could allow for the ratio to climb a little higher, but the downside risk is increasingly massive.