When the Fourth Turning Begins, Markets Reprice Trust And Not Just Assets
The Dow to Gold ratio isn’t about calling the top in stocks or predicting a crash next week. It’s a long arc signal about confidence. When the ratio is high, it usually means investors are comfortable owning claims on future growth in stocks, earnings, promises. When it rolls over and trends lower for years, it’s usually because that confidence is fading and people start preferring assets that don’t depend on anyone else keeping their word. Gold doesn’t need earnings, policy support, or growth assumptions. It just sits there. A falling ratio is the market quietly saying that it trusts certainty more than optimism right now.
Why The Turning Matters
What stands out on this chart isn’t the volatility, it’s the duration. Every major decline in the ratio wasn’t a quick panic; it was a multi year repricing tied to a broader shift in the system. Stocks didn’t always implode overnight. Sometimes they went sideways for a decade while gold did the work. That’s the part people miss. You don’t need a dramatic crash for this ratio to fall hard. You just need an environment where real returns on financial assets are capped, diluted, or slowly eroded while uncertainty keeps rising.
How This Lines Up With A Fourth Turning Mindset
This is where the historical lens helps. Periods that later get described as crisis eras tend to share the same feel where institutions lose trust, policy becomes reactive instead of principled, and stability gets prioritized over efficiency. In those moments, markets stop rewarding growth narratives and start rewarding durability. That’s exactly the backdrop where the Dow to Gold ratio tends to compress. Not because people suddenly hate stocks, but because the system itself is being renegotiated on who pays, who’s protected, and what really counts as wealth.
My View
The chart is whispering regime change. It’s telling you that the next decade may look less like the last one, less about compounding returns and more about protecting purchasing power through uncertainty. Whether that plays out through lower stock prices, higher gold prices, or a long stretch of frustration in between, the message is the same that when confidence becomes scarce, collateral starts to matter more than stories.
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