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The Dow Priced in Ounces of Gold: Secular Bear Market Since '99
Seeking Alpha ^ | 3 August 2008 | Kirk Lindstrom

Posted on 08/03/2008 5:07:56 PM PDT by shrinkermd

When measured in ounces of Gold, the DOW has been in a secular bear market since peaking in late 1999.

Back in 1999, it took 45 ounces of gold to buy the DJIA. Today it only takes 12.33 ounces of gold to buy the DOW! Cutting the Fed Funds target rate from 6.50% in January 2001 to 1.0% in June 2003 may have inflated the US stock market out of its bear market when priced in dollars but it had consequences that we are feeling today.


TOPICS: Business/Economy; Editorial
KEYWORDS: bearmarket; dji; gold
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To: shrinkermd
Back in 1999, it took 45 ounces of gold to buy the DJIA. Today it only takes 12.33 ounces of gold to buy the DOW!

Don't forget to ignore dividends.

21 posted on 08/03/2008 7:14:49 PM PDT by Toddsterpatriot (Half the time it could seem funny, the other half's just too sad.)
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To: ErnBatavia

I’ve got 100 1 oz troy pieces....I could make some money on them but I think maybe they’ll be for the grandchildren if’n I ever have any...


22 posted on 08/03/2008 7:16:05 PM PDT by cherry
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To: InABunkerUnderSF

That graph goes back to 1800.

The Dow began in 1896.

What in the hell are you talking about?


23 posted on 08/03/2008 7:20:46 PM PDT by Petronski (The God of Life will condemn the Chinese government. Gao li means GULAG.)
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To: BenLurkin; shrinkermd
"Gold, also measured in dollars (at least for those of us here in the USA) is merely an investment vehicle that competes with stocks for investment dollars."

Gold is not an investment vehicle; it is a hedge, or stabilizer. It normally changes slowly, but in a crisis will rise rapidly.

24 posted on 08/03/2008 7:22:11 PM PDT by editor-surveyor (Jimmy Carter is the skidmark in the panties of American History)
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To: Petronski

And gold was fixed at $20 until 1933, at $35 until 1971.


25 posted on 08/03/2008 7:22:28 PM PDT by Toddsterpatriot (Half the time it could seem funny, the other half's just too sad.)
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To: cherry
"I’ve got 100 1 oz troy pieces"

Would you like for me to keep them for you? They must be making your bed spring sag...

26 posted on 08/03/2008 7:27:21 PM PDT by editor-surveyor (Jimmy Carter is the skidmark in the panties of American History)
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To: shrinkermd

See tagline.


27 posted on 08/03/2008 7:30:08 PM PDT by Uncle Miltie (Bernanke is a Monetary Slut!)
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To: shrinkermd
here we go with the gold fanatics again.

Why not price it in cubic feet of helium?

28 posted on 08/03/2008 7:45:05 PM PDT by the invisib1e hand (when did the circus freak show escape and take over the entire world?)
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To: groanup

Six years of phenomenal growth in the government, government contractors, military contractors, and W’s oil buddies. Too bad vetoes didn’t show any growth.


29 posted on 08/03/2008 8:18:01 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Petronski

See the source.

The index of the 30 largest stocks has only been published since 1896 but it can be computed back from there. Pretty good returns over time and this doesn’t include dividends.


30 posted on 08/03/2008 11:00:45 PM PDT by InABunkerUnderSF ("Gun Control" is not about the guns. "Illegal Immigration" is not about the immigration)
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To: the invisib1e hand

Because helium has not been around for trading for 10,000 years. And helium is not a store of value.


31 posted on 08/04/2008 12:00:04 AM PDT by shrinkermd
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To: InABunkerUnderSF
The index of the 30 largest stocks has only been published since 1896...

At the start there were only twelve.

...but it can be computed back from there.

You claim an industrial average can be extrapolated back 96 years, decades prior to the industrial revolution?

Ludicrous.

32 posted on 08/04/2008 3:19:21 AM PDT by Petronski (The God of Life will condemn the Chinese government. Gao li means GULAG.)
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To: Moonman62
Six years of phenomenal growth in the government, government contractors, military contractors, and W’s oil buddies.

What tools does a president have to spur economic growth? Cut taxes and get out of the way. Which he did, and the results were phenomenal.

Oil buddies? Are you one of those Haliburtophobes?

33 posted on 08/04/2008 5:43:16 AM PDT by groanup (Here, bend over and let me give you my carbon footprint.)
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To: shrinkermd
Because helium has not been around for trading for 10,000 years. And helium is not a store of value.

Helium has been around at least as long as gold. And it's a whole lot more fun.

Why can't it be a store of value?

34 posted on 08/04/2008 5:43:52 AM PDT by the invisib1e hand (when did the circus freak show escape and take over the entire world?)
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To: shrinkermd

bttt


35 posted on 08/04/2008 5:54:26 AM PDT by dennisw (That Muhammad was a charlatan. Islam is a hoax, an imperialistic ideology, disguised as religion.)
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To: arthurus

Well, in that light, a lot of things are Bush’s fault: He didn’t like going against the status quo, and didn’t veto a lot of bad bills, and left a lot of Clinton appointees in office, including retaining Greenspan.


36 posted on 08/04/2008 6:52:50 AM PDT by coloradan (The US is becoming a banana republic, except without the bananas - or the republic.)
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To: Petronski

Given the proper source material, i. e. the stock prices as published daily by the exchange and reported by the press it should be possible to compute any index back to the origin of the market. Not saying I’d like to do it but if some bright boy or girl working for his masters wanted to try it I’m sure they could.

Ludicrous though it may be, I’ve seen the chart published in several books.

But far be it from me to introduce facts, observations or opinions that contradict your obviously superior preconceptions.


37 posted on 08/04/2008 7:30:05 AM PDT by InABunkerUnderSF ("Gun Control" is not about the guns. "Illegal Immigration" is not about the immigration)
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To: InABunkerUnderSF

Ten chimps picking numbers from lotto ball machines would produce results just as accurate.


38 posted on 08/04/2008 7:52:58 AM PDT by Petronski (The God of Life will condemn the Chinese government. Gao li means GULAG.)
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To: muawiyah
However, gold is also used as money: If banks were required
to maintain gold in reserve in a ratio to loans, we wouldn’t be in this mess.
39 posted on 08/04/2008 7:59:16 AM PDT by upcountryhorseman (An old fashioned conservative)
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To: groanup

The only tax cuts that worked were authored mainly by Congressman Bill Thomas in 2003. W’s tax cuts like the one time rebates that he’s doing again don’t work. The president has influence on the value of the dollar since his agency, the Treasury can choose to intervene or not intervene. He has 100% control over executive orders. He should have lifted the ban on offshore drilling back in 2001. He can influence the regulations and spending coming out of Congress with vetoes, which he chose not to do. He supported big budget increases for the IRS and SEC so they could harass businesses and individuals. He supported Sarbanes Oxley which has had a negative impact on our economy. And he supported amnesty for illegals.


40 posted on 08/04/2008 8:06:03 AM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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