The DOW and Bullion for Dick & Jane.....................from Rico

Any of the LoFo's who are getting their 'news' from the MSM and/or seriously listening to the teleprompter-reading Judas goats of MSNBC, CNBC, et al are probably quite beyond hope. Or financial salvation.

- They are going to the slaughterhouse.

Presented as a public service for Dick and Jane, however, is a 'look' at what these goofy DOW headlines REALLY mean as opposed to what their wannabe Masters and Rulers want them to 'think' they mean.

DOW.

A large part of Mainstreet America does not own any stocks. An even larger swath is confused by the difference between 'nominal' and 'real' (adjusted for inflation). Apart from a general 'impression' that happy days are here again, the new-new all-tme DOW highs do not mean anything materially to them.

- As a bonus, the government and the FED lie about inflation. The 'party line' is that there isn't much to be concerned about...and since so few follow John Williams of Shadowstats.com, they easily get away with this whopper.

Adjusted for inflation, the DOW is actually DOWN 11% from 2000.

- So much for the hoo-haw about the DOW being at new-new peaks.

Now look at the S&P (down 26%) and the NASDAQ (down 58%) for the same period. Recovery? Riiiiiight.

- This is also the 'inflation' you do not have. The Dollar is worth less. A lot less. Consider that the Dollar is only 'worth' what it can buy in the real economy.

BULLION.

Even though Mom & Pop America own even LESS bullion than they do stocks, comparing bullion to the DOW is also useful.

In Jan 2000:

- Gold traded at $284.32/oz, the DOW was at 10,900. 10,900/$284,32 = 38.33 oz of Gold to buy the DOW.

- Silver traded at $4.95/oz. 10,900/$4.95 = 2,202 oz of Silver to buy the DOW.

Today:

- Gold is trading ~ $1570.90/oz, the DOW is 14,284. 14,284/$1570.90 = 9.09 oz of Gold to buy the DOW.

- Silver is trading ` $28.62/oz. 14,284/$28.62 = 499 oz of Silver to buy the DOW.

Of course, an ounce of Gold or an ounce of Silver remains one ounce.

- It is the purchasing power of the Dollar that is shrinking rapidly, an if you hold fiat or fiat-denominated paper assets you are guaranteed to lose.