Mike Maloney: The Dow is crashing
(Of course, the guy is in the business of selling gold and silver, so take that into account) In the long run, we're all dead. John Maynard Keynes
Heads Oil wins: Tails the Dollar loses.
Unfortunately it's the entire planet that has become the stake in the Dollar vs Liquid Fuels wager.
(Of course, the guy is in the business of selling gold and silver, so take that into account)
the dow in terms of computer chips has exploded.
but the dow in terms of uranium is horrible.
of course the euro in terms of uranium is horrible, and gold in terms of uranium is horrible, and crude oil in terms of uranium is horrible.
the real measure of the Dow, or the Nasdaq, or the S&P 500 is not in oil or in uranium, it's in dollars. just like the real measure of the EU exchanges is in euros.
what you say is clever but obfuscating.
Please explain to me how can this be obfuscating on European Tribune?
I'm curious, thanks!
Over the last ten years (apr1997-apr2007), european buying in STOXX50E got slightly better euro returns than if they invested in NASDAQ (2.0x vs 1.9x). I did not try wider indexes.
I think that Bush's administration did a lot (if not everything) to increase "demand" for speculative stocks and decrease demand for dollar. Oh yeah, that's what they are preaching - supply-side economy, push all the money into stocks.
The Dow is, as you say, less speculative. It's essentially the big dogs in American business. If you want to know where America is headed, though, the S&P and NASDAQ are probably the better choices, given the larger number of companies.
DJIA is where you dump your money when you want to play a conservative game, because people are always going to buy things from Wal-Mart and Johnson & Johnson. It's more stable, whereas NASDAQ is all over the place. NASDAQ companies are often engaged in fiercely competitive markets and can get tossed around like it's nobody's business. Intel and AMD come to mind. WHEEEEEEEEEEEEEEEEEEEEE!
Expressing the Dow in euros is a lot more relevant to us here in Europe - and definitely legitimate and meaningful in terms of "value". The fact that the dollar has lost 40% of its value against the euro over the period has to mean something, right?
I mean, market cannot be that wrong? In the long run, we're all dead. John Maynard Keynes
you can cherry pick dates to prove anything you want on returns on the American stock markets, since stock markets have cycles, though the long term trend is up. The Dow was 10791 at the beginning of the decade, which was Jan 2, 2001, so it is 21.6% higher today, six years later, and that is definitely lower than the longer term growth figures. If you chose January 2000 the returns would be far less. If you chose 1995 they would be far better. The long term returns from US equities are about 10% nominal and 7% real.
But the US economy is incredibly strong in recent times. There has been one very minor recession since 1991, which is an incredible period of prosperity, particularly thinking of the challenges of the tech wreck, 9/11, a poorly chosen and poorly run war in Iraq,,,,just to pick a few.
the "natural" value unit should be related to your assets/income and your expenses. So pricing things in oil, or in Euros, makes sense depending on who you are, where you are and what you do.
but managing in oil or in gold does not make sense to me, nor does managing your affairs in cans of soup or pasta, as your referenced article points out.
I've yet to meet a gold bug that wasn't a little bit cracked.
It's all relative.
Now, I take the view that Money is "Dynamic Value" and exists only in the transitory moment of Value Exchange by reference to a "Value Unit" (Mig's Numeraire).
Capital, on the other hand (underpinned by the "Property" relationship) is "Static Value" or "Potential Money".
IMHO "Value" is a direct analogy for "Energy" , and that Economics could be thought of as the "Physics of Value".
Wikipedia: Applications of Gold
Some gold salts do have anti-inflammatory properties and are used as pharmaceuticals in the treatment of arthritis and other similar conditions. However, only salts and radioisotopes of gold are of pharmacological value, as elemental (metallic) gold is inert to all chemicals it encounters inside the body. Gold solder is used for joining the components of gold jewellery by high-temperature hard soldering or brazing. Dentistry: ... The gold alloys' slight malleability facilitates the creation of a superior molar mating surface with other teeth and produces results that are generally more satisfactory than those produced by the creation of porcelain crowns. In photography, Gold toners are used to shift the colour of silver bromide black and white prints towards brown or blue tones, or to increase their stability. Gold is highly conductive to electricity, and has been used for electrical wiring in some high energy applications (silver is even more conductive per volume, but gold has the advantage of corrosion resistance). ... Though gold is attacked by free chlorine, its good conductivity and general resistance to oxidation and corrosion in other environments (including resistance to non-chlorinated acids) has led to its widespread industrial use in the electronic era as a thin layer coating electrical connectors of all kinds, thereby ensuring good connection. ... Besides sliding electrical contacts, gold is also used in electrical contacts because of its resistance to corrosion, electrical conductivity, ductility and lack of toxicity. Colloidal gold is used in research applications in medicine, biology and materials science. Gold, or alloys of gold and palladium, are applied as conductive coating to biological specimens and other non-conducting materials such as plastics and glass to be viewed in a scanning electron microscope. Gold is used as the reflective layer on some high-end CDs. The isotope gold-198, (half-life: 2.7 days) is used in some cancer treatments and for treating other diseases.
Gold solder is used for joining the components of gold jewellery by high-temperature hard soldering or brazing.
Dentistry: ... The gold alloys' slight malleability facilitates the creation of a superior molar mating surface with other teeth and produces results that are generally more satisfactory than those produced by the creation of porcelain crowns.
In photography, Gold toners are used to shift the colour of silver bromide black and white prints towards brown or blue tones, or to increase their stability.
Gold is highly conductive to electricity, and has been used for electrical wiring in some high energy applications (silver is even more conductive per volume, but gold has the advantage of corrosion resistance). ... Though gold is attacked by free chlorine, its good conductivity and general resistance to oxidation and corrosion in other environments (including resistance to non-chlorinated acids) has led to its widespread industrial use in the electronic era as a thin layer coating electrical connectors of all kinds, thereby ensuring good connection. ... Besides sliding electrical contacts, gold is also used in electrical contacts because of its resistance to corrosion, electrical conductivity, ductility and lack of toxicity.
Colloidal gold is used in research applications in medicine, biology and materials science.
Gold, or alloys of gold and palladium, are applied as conductive coating to biological specimens and other non-conducting materials such as plastics and glass to be viewed in a scanning electron microscope.
Gold is used as the reflective layer on some high-end CDs.
The isotope gold-198, (half-life: 2.7 days) is used in some cancer treatments and for treating other diseases.
But, yeah, the "Gold standard" is a throwback to a time when wealth was flaunted by wearing and using gold. Bush is a symptom, not the disease.
wonder how that would turn out if a real alchemist turns up?
