I post this knowing full well that only about 10% of people will even be able to digest it (it has #'s and %'s are implied so most are sunk).
If true (I have not done the math myself, like back when I showed with basic math that Reagan was a mega govt spender) it shows how silly it is to ever really measure anything but your income/personal expenses in dollars. For anything larger, we might be best to measure it in silver....or cords or firewood vs. the us dollar, in order to really understand now vs. the past or the future.
Essentially the DOW is doing really crappy right now, despite being near it's all time high, because it is an investment and we are measuring it with dollars, which don't have a stable value, in fact keep becoming worth less, so when the dow shoots up, you need to divide by the new lower value of the dollar. This article shows the dow measured by other major investments and it is doing very poor. If you have money in the dow for the last 10 years, you have lost big time, by most comparitive measures, the dow right now is where it was in the late 80's.
Leaving your money on wall st? They are just loosing it for you, even when the measure says they are doing their best ever! What measurement do you use to tell if you stocks are doing well....I hope it is not the stock price in $'s? Take those $ prices and divide it by the current price of cordwood and you will have a much better measure to see if there is any growth.
The first thing I always look for in long term price graphs is a logarithmic Y axis. If the author uses a linear scale, then he has no clue about math and compound interest. A lot of linear long term graphs look like hockey sticks. Its meaningless.
Price comparisons to commodities is interesting though, shows the effects of inflation and money printing.
Some good points there. Right now the system is tipped against savers and for debtors. Earning almost no money on your savings, and debtors from VL to Greece are being allowed to write down their contracted debt. The money investors are earning has been watered down by Bernanke.
Thomas Sowell: There are no solutions, just trade-offs.
Yes Fred, its tipped against savers, and people who pay their debt and bills. If we were smart, we would sell the house, put all non-IRA assets in gold coins, a few foreign currencies like Canada and Australia, finance the biggest luxury motor home you can, quit the slave job and tour the country. Don't even bother making payments on the motor home or insuring it. Sign up for food stamps and free Obamacare and live the good life. Hey, I think I'll do that in a few years. LOL
If you want to be, press one. If you want not to be, press 2
Republicans are red, democrats are blue, neither of them, gives a flip about you.
The only reason you feel like you should sell the house is because it has no real value. If your house is on small acrage it is of little long term value, it only has short term market value (see recent market collapse) if your house is on 1000 acres of farmland, you would be nuts to trade farmland for gold to protect your wealth.
Your comment about the log axis is actually off. If the economy was not set up to have everything get eaten by inflation, you would not be concerned about making straight lines out of curved ones. Also the log axis removes a layer of subtle information about the rate of change, most would not understand what they are looking at, though they may feel better because they made straight lines. I have no issues looking at raw data of dollars or ounces of gold graphed against time, the data makes sense to me. What you said is kind of like someone complaining about someone using big words just because most people don't know the words. The log axis is kinda like dumbing down so that more people understand or think they understand.
Bottom line, your buying power has not increasing by leaving your money in the dow past the turn of the century, the old days are over. Perhaps the best measurement of anything would be if you convert it to food, how many people could you feed?
I like when the Economist uses the Big Mac index to determine the real value of currency. If this economy gets much worse, will it be the MRE or 100# bag of rice index?
Thomas Sowell: There are no solutions, just trade-offs.
popcorn eater wrote: Your comment about the log axis is actually off. If the economy was not set up to have everything get eaten by inflation, you would not be concerned about making straight lines out of curved ones. Also the log axis removes a layer of subtle information about the rate of change, most would not understand what they are looking at, though they may feel better because they made straight lines.
Well, sorry popcorn, we are just going to have to disagree on this, and its going off topic.
A log scale shows a straight line, with a slope equal to the rate change. Its pure math, not opinion. The purpose of a graph or illustration is to show something clearly, not dumb things down. If you can interpret and compare linear scale, long term exponential graphs, you are pretty sharp.
Cheers!
towermonkey wrote: Seems like the overall money supply would be a good measure of how diluted the dollar has gotten.
Yep the money supply has exploded, and graphs of it are shocking really. Hasn't done much harm yet though, but the FED has to unwind this money they pumped in someday.
If you want to be, press one. If you want not to be, press 2
Republicans are red, democrats are blue, neither of them, gives a flip about you.
