Pay attention to the “fiat capital era,” which is the one marked by the creation of the Federal Reserve Board—the U.S. Central Bank. Fiat literally means by decree; in other words, value is not set by the economic law of scarcity but rather by political legislation. A Dow measure of, say 11,000 is insignificant unless it is compared against a standard of value. Gold has historically been such standard.
As you can see from the graph, true stock market bottoms are set when the Dow-Gold ratio is between 1.5 and 3.0. Presently the ratio stands at 9.74, which about 33 points below of the all-time high set in 1999. Two things have caused this shrinkage: the Dow has declined and gold has risen. Based on this measure of value, the stock market is significantly overvalued on a long-term basis. This will be corrected in our generation. What is impossible to predict is exactly when it will occur.