10k Dow, Lowest In 12 Years

[Kathianne]

Magic numbers don't change reality. The dollar's fall accounts for the inflated numbers:

http://www.zerohedge.com/article/dow-10000-oh-wait-make-7537


While in absolute terms the Dow may cross whatever the Fed thinks is a necessary and sufficient mark before QE begins to taper off (Dow crosses 10k just as Treasury purchases expire), the truth is that over the past 10 years (the first time the DJIA was at 10,000) the dollar has lost 25% of its value. Therefore, we present the Dow over the last decade indexed for the DXY, which has dropped from 100 to about 75. On a real basis (not nominal) the Dow at 10,000 ten years ago is equivalent to 7,537 today! In other words, not only have we had a lost decade for all those who focus on the absolute flatness of the DJIA, but it is also a decade where the US Consumer has lost 25% of purchasing power from the perspective of stocks! You won't hear this fact on the MSM.



And if you want to be really scared, here is the comparable representation for the DJIA in ounces of gold. It cost about 30 ounces to buy the 10,000 Dow last time. Now it costs less than 10.

Great graphs at site.

[Noir]

Magic numbers don't change reality. The dollar's fall accounts for the inflated numbers:

http://www.zerohedge.com/article/dow-10000-oh-wait-make-7537



Great graphs at site.

Justa quick question,
Does that take into account the fall in value of other currencies, becuase the £ to $ ratio use to be about £1 to $2, and its now £1 to $1.6, is of the doller is relitivly down 25% then the pound is doing much worse.
Or is this a non-relivite drop of 25% judging the current dollar against the doller of a few years ago?

[Kathianne]

Justa quick question,
Does that take into account the fall in value of other currencies, becuase the £ to $ ratio use to be about £1 to $2, and its now £1 to $1.6, is of the doller is relitivly down 25% then the pound is doing much worse.
Or is this a non-relivite drop of 25% judging the current dollar against the doller of a few years ago?

I think it's a discussion only of US dollar and stock market. To see difference by currencies you'd have to change the variable figures to each currency.

[Noir]

I think it's a discussion only of US dollar and stock market. To see difference by currencies you'd have to change the variable figures to each currency.

But surly its daft to compare the Dollar to what it was without taking into account the drop in value of other currencies,

[Kathianne]

But surly its daft to compare the Dollar to what it was without taking into account the drop in value of other currencies,

Not when comparing dollars to dollars. In actuality it's going back about a year. It's like 'invisible inflation.' Bush and now Obama have been purposely devaluing the dollar.