THOSE who do not remember the past are condemned to repeat it.

Many look to history to learn general truths about human nature and behaviour, and hopefully, reveal lessons for the future. Indeed, we have many reasons to give thanks to this great teacher, where many noble values are conveyed and eventually enrich anthropologic studies. In the same vein, history contains important lessons for market behaviour as well. The study of past economic crises is important for policymakers to craft macro-prudential policies, as well as crucial market and banking regulations, in order to facilitate growth, and eventually to mitigate possible economic shocks.

On this, the relative values of crude oil and gold offer interesting insights, given its extreme values seen during the banking crisis in the early 1980s, the Asian Financial Crisis (AFC) of 1997 and the Global Financial Crisis (GFC) of 2008. Specifically, focusing on the period of the fall of Lehman Brothers in 2008, the gold-oil ratio (the number of oil barrels needed to purchase one ounce of gold) leapt from 6.4 in June 2008 to 28.2 in February 2009, as oil price went from its glorious US$140 per barrel handle to its trough of US$34/bbl over the same period. On the other side of the equation, gold price merely see-sawed from an initial US$934 per ounce to an eventual appreciation to US$978/oz over the same period as the market embarked on its flight to safety behaviour.