Myrmikan Capital: SPX-Gold Ratio Reveals the U.S.’s Troubled Economy
Analysts believe that the growth of precious metals, including gold and silver, to current price levels is an indication that something has broken.
Daniel Oliver, Managing Member of Myrmikan Capital, shares this belief. In the latest report of Myrmikan Research, titled “ Gold Measures the Real Value of Other Assets,” Oliver highlights that any stock gains in the last two years become irrelevant when taking gold as the measuring asset instead of the U.S. dollar.
He stresses that the SPX index, which has gained 59% in dollars since October 2023, loses its allure when measured in relation to gold. During the same period, the SPX lost 58% of its value, indicating that, on average, the stock market has also declined by 58% against gold.
Oliver explains that, even if a massive credit stimulus is applied to the economy, this ratio can continue to fall, reaching levels experienced during the 2008 subprime crisis. If this happens, gold will reach $8,300 per ounce.
If the ratio reaches the 1979 low after the inflationary debt collapse of the 70s, it would require gold to trade at $40,000 per ounce.
Oliver believes that this time, there will be no credit bubble to help fix this imbalance, as U.S. Treasuries are becoming riskier reserve instruments because of the weaponization of the U.S. dollar. “If this mechanism breaks, and it appears to be teetering, then the full weight of debasement will hit the U.S.,” he concluded.
Oliver’s considerations are similar to renowned investor Ray Dalio’s thoughts on gold. Dalio declared that the biggest story in 2025 was the debasement of the American currency, explaining that the stock market boom was a lie as “looking at the investment returns through the lens of a weak currency makes them look stronger than they really are.”
FAQ
What do analysts believe about the current price levels of precious metals? Analysts, including Daniel Oliver, suggest that the rising prices of gold and silver indicate that something fundamental in the market has broken.
How does Daniel Oliver measure stock performance against gold? Oliver’s research indicates that while the SPX index gained 59% in dollars, it lost 58% of its value when measured in gold, highlighting a decline in the stock market’s real value.
What predictions does Oliver make regarding gold prices? He warns that if the current imbalance continues, gold could reach $8,300 per ounce or even $40,000 per ounce, similar to levels seen during past financial crises.
How do Oliver’s views align with those of Ray Dalio? Both investors express concern over the debasement of the U.S. dollar, with Dalio emphasizing that perceived investment returns may be misleading when assessed against a weakening currency.
