Saturday, March 27, 2010
The DOW (U.S. Dow Jones Industrial Average / Stock Market) hit an all time high closing above 14,000 in 2007. The general public seems to view the U.S. economy as good, for example, when the DOW is at 12,000 or more or bad when the DOW is at 8,000 or below. This is not a good way to judge the U.S. economy in my opinion because the stock market is inversely correlated with the US Dollar. In other words, the weaker the dollar is (as measured by the USD Index) the higher the stock market is, generally.
Knowing this, I don't want the stock market to set any more all time high's anytime soon because that would entail a weaker dollar, leading to high costs for energy, food, and living.
What happened in 2007 when the DOW was trading above 14,000?
- Crude oil traded above $90 a barrel for the first time ever.
- The USD Index had broken it's long term support at 80 and began it's fall to all time lows.
- National gas prices began their run from $2.80 something to over $4.00 a gallon.
- And, four United States Air Force officers are relieved of command following an investigation of an incident where live nuclear warheads were carried on a B-52 bomber from Minot Air Force Base in North Dakota to Barksdale Air Force Base in Louisiana.
I could go on and on, but those four things are enough for me to dislike another DOW 14,000 year! But it's inevitable that the DOW reaches 14,000 again and sets new all time high's very soon because the US dollar still has a big collapse ahead of it. So I feel extremely safe with my money in food, silver, gold, and oil.
And try to ALWAYS measure the DOW in REAL MONEY (the number of ounces of gold it takes to buy one share of the Dow).
DOW PRICED IN GOLD
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