October 15, 2009 - Many investors decided to liquidate their stock assets, causing the Dow Jones Industrial Average(DJIA) to fall below 10,000 after just a few hours atop this psychological barrier. The widespread skirmish of profit-taking, which was also evident in the Nasdaq and S&P 500 indexes, has been blamed by many blue-chip economists on the recent rally by gold bullion prices. More investors than previously expected decided to exit the stock market once it surpassed 10,000, which sent that index reeling earlier this morning. Some economists have called for a substantial correction in the gold spot price, but today's flood of investors wishing to trade their securities for gold bullion has sustained spot prices. The DJIA first reached the 10,000 mark in 1999, and last visited that milestone a year ago. Many investors feel frustrated because of the setback in US stocks, many of which are still far below levels from two years ago. Bianco Research reports that DJIA shares have only produced 1.61% annually throughout the last 10 years. Gold has increased over 300% within that time, but precious metals are not the only investments that have outpaced the DJIA. Bonds have provided investors with almost four times as much within the same time frame, and even cash accounts would have performed twice as well during the last decade. If corporate debt continues to devour companies, then shareholder profits could indeed suffer. Many corporations, including DJIA-listed companies, have already slashed their overhead below the neck, yet profits still manage to elude their grasp. The short-term trends are not all that matter, however, so savvy investors track what long-term trends have occurred in the past when similar financial problems persisted in our nation.

In the 1930s, and again in the 1970s, corporate debt was sky-high and inflationary pressures on the US dollar were tremendous. As portfolios withered like a lone flower in the cracked asphalt at high noon, gold bullion and other commodities started to climb. The growth patterns in gold lasted for over a decade during the last cycles, and many economists believe that the gold price could expand its record-high repeatedly throughout the next three years. Gold bullion for October delivery is presently trading based on a spot price of $1051.80, which is a 1.14% decrease for the trading day. 

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Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org