Thursday , 24 August 2017


Dow 13,000 is Meaningless When Priced in Gold! Here's Why

Dow 13,000 is a meaningless number! [True] the DJIA index has touched that number for the first time since 2008 but, when priced in gold, it has actually declined. Let me explain. Words: 245

So says Mark Motive (www.planbeconomics.com) in edited excerpts from his original article* as posted on Seeking Alpha which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!),has further edited below for length and clarity – see Editor’s Note at the bottom of the page. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Motive goes on to say, in part:

Quite simply, some of the biggest stock market booms in history were coupled with the some of the biggest currency devaluations in history. The Weimar Republic and Zimbabwe are two examples that come to mind. I’m not saying that the U.S. is anywhere close to the Weimar Republic or other hyperinflationary environments (at least, not yet), but the same principles apply. With trillions of dollars injected by central banks into the global financial markets over the past few years, I can’t help but think these stock market gains are somewhat diluted. Housing deflation aside, is $1 today what it was at the bottom of the market in March 2009?…

One of my preferred proxies for monetary expansion is gold. When measured in terms of gold, the DJIA has actually fallen by almost 11% since the March 2009 bottom [while] the DJIA has risen over 70% in nominal terms during the same time period [see chart below].

In my opinion, we should be concerned about this massive discrepancy, and celebrating Dow 13,000 may be premature.

*http://seekingalpha.com/article/380571-dow-13-000-try-that-priced-in-gold?source=email_macro_view&ifp=0

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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