Oct 15
The Dow his 10,000 again yesterday. But if you factor in the drop of the dollar since the last time the Dow was at 10,000 it is actually Dow 7,537.
This chart, from Zero Hedge, shows the impact in terms of gold:
What once cost 30 ounces of gold now costs 10.
Given the path of the dollar and our governments crazy dollar printing plans, can Dow 20,000 be far away?
October 15th, 2009 at 4:20 pm
A little economics can be a dangerous drug. These value shrinkages are in terms of foreign currency (DXY index) and gold, both a reflection of supply and demand in international markets. Internally, the dollar ‘s purchasing power is little changed from Dow 10000 a year ago since inflation has been so low that there is no COLA for federal pensions next year. Also, a lower dollar encourages exports which is why the Japanese and the Chinese deliberately keep their currency low. So, the devaluation helps SciTools sell more software.
October 15th, 2009 at 5:46 pm
Some would say there has been deflation.