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Mark Lundeen each week sends me his comparison of the Dow Jones Industrial Average decline since October 2007 relative to declines after September 1929. Given the dependency of large cap stocks on earnings generated by government contracts and purchases and the dependency of stock prices on market intervention and bailouts by the US government and central bank, this is a comparison I watch carefully. You can track Mark’s ongoing series at gold-eagle.com.
3 Comments
it would be great to see inflation-adjusted chart, esp since political finance has pretty much stated publicly that they’d be keeping the dow at around 8,000 (whether they truly can keep it @ 8000 is another question; but they’ve been doing well so far). if they’re going to pump money (credit/debt/future labor) into the market and artificially inflate the markets at their current levels, it’s going to impact charts like these which, no doubt, is probably the psychological (and legal) goal. I’m curious to know what others’ thoughts are.
Hi PermaculturePrana
One must remember that economics is not science, although economist like to think it is. So when you adjust the DJIA for inflation, what measurement of inflation should be used? CPI, PPI, M1/2 or CinC? I like CinC as it is unaffected by credit creation.
Deflating the DJIA with CinC from April 1953 to January 2009, the DJIA has lost $8.00. But with the phantom inflationary capital gains, politicians have collected taxes and Wall Street made its commissions.
If after a two decades of investing, and seeing your net worth grow but you life style diminish, here is why.
Mark J Lundeen
thanks for the message mark. hasn’t that worth grown, but lifestyle diminished been happening for 30+ years now (one could even argue some 95 years).
thanks for the point. but even with different metrics (and I wonder if ShadowStats has such a graph), why not create many different graphs? i’m not into the depth of stats and econ, though as someone who’s followed geopolitics for much of the past 15 years, econ is essential! thanks again!
it would be great to see inflation-adjusted chart, esp since political finance has pretty much stated publicly that they’d be keeping the dow at around 8,000 (whether they truly can keep it @ 8000 is another question; but they’ve been doing well so far). if they’re going to pump money (credit/debt/future labor) into the market and artificially inflate the markets at their current levels, it’s going to impact charts like these which, no doubt, is probably the psychological (and legal) goal. I’m curious to know what others’ thoughts are.
Hi PermaculturePrana
One must remember that economics is not science, although economist like to think it is. So when you adjust the DJIA for inflation, what measurement of inflation should be used? CPI, PPI, M1/2 or CinC? I like CinC as it is unaffected by credit creation.
Deflating the DJIA with CinC from April 1953 to January 2009, the DJIA has lost $8.00. But with the phantom inflationary capital gains, politicians have collected taxes and Wall Street made its commissions.
If after a two decades of investing, and seeing your net worth grow but you life style diminish, here is why.
Mark J Lundeen
thanks for the message mark. hasn’t that worth grown, but lifestyle diminished been happening for 30+ years now (one could even argue some 95 years).
thanks for the point. but even with different metrics (and I wonder if ShadowStats has such a graph), why not create many different graphs? i’m not into the depth of stats and econ, though as someone who’s followed geopolitics for much of the past 15 years, econ is essential! thanks again!
Mark Lundeen each week sends me his comparison of the Dow Jones Industrial Average decline since October 2007 relative to declines after September 1929. Given the dependency of large cap stocks on earnings generated by government contracts and purchases and the dependency of stock prices on market intervention and bailouts by the US government and central bank, this is a comparison I watch carefully. You can track Mark’s ongoing series at gold-eagle.com.
it would be great to see inflation-adjusted chart, esp since political finance has pretty much stated publicly that they’d be keeping the dow at around 8,000 (whether they truly can keep it @ 8000 is another question; but they’ve been doing well so far). if they’re going to pump money (credit/debt/future labor) into the market and artificially inflate the markets at their current levels, it’s going to impact charts like these which, no doubt, is probably the psychological (and legal) goal. I’m curious to know what others’ thoughts are.
Hi PermaculturePrana
One must remember that economics is not science, although economist like to think it is. So when you adjust the DJIA for inflation, what measurement of inflation should be used? CPI, PPI, M1/2 or CinC? I like CinC as it is unaffected by credit creation.
Deflating the DJIA with CinC from April 1953 to January 2009, the DJIA has lost $8.00. But with the phantom inflationary capital gains, politicians have collected taxes and Wall Street made its commissions.
If after a two decades of investing, and seeing your net worth grow but you life style diminish, here is why.
Mark J Lundeen
thanks for the message mark. hasn’t that worth grown, but lifestyle diminished been happening for 30+ years now (one could even argue some 95 years).
thanks for the point. but even with different metrics (and I wonder if ShadowStats has such a graph), why not create many different graphs? i’m not into the depth of stats and econ, though as someone who’s followed geopolitics for much of the past 15 years, econ is essential! thanks again!
Gesher