The 12-year stealth Bear Market

Whenever someone logs onto Yahoo Finance and looks at what the Stock Market did today, they are looking at the Nominal Dow. What most do not realize is that, in real terms, the stock market has collapsed in value since 2000. If instead of looking at the nominal Dow one were to look at the real Dow, priced in Gold, you would be seeing the Dow not at 12,000, but at a level below 200. No, that is not a typo. the Dow has made no net progress since 1926. In a recent interview, an excerpt of which can be found here,  Robert Prechter talked about the stark difference between the Nominal Dow and the Real Dow, or even the Dow divided by the Producer Price Index. In other words, if you were to price the Dow in anything else other than U.S. Dollars, it would be much lower than it is today. The fact that Nominal Prices have held up over the past decade is a reflection not of the value of the Dow staying relatively constant, but of the value of the U.S. Dollar going down. The Nominal Dow can be viewed as:

Value of the Dow/ Value of the U.S. Dollar

Using simple math, one can see that, if you decrease the denominator (in this case the value of the U.S. Dollar) , it makes it it appear that the value of the Dow is up, since the value of the entire fraction increases, however it is really just the value of the measuring unit decreasing. This devaluation of the U.S. Dollar has been courtesy of the Federal Reserve and our Debt-Money System. Therefore, when the Debt-money system collapses, and the U.S. Dollar starts rising in a highly deflationary environment, which has already begun in 2006-2008, and should accelerate in coming months and years, the whole house of cards will come down, and the Nominal Dow will collapse in value, as it should have in 2000. But, these genius central planners have managed to hold up this debt Ponzi Scheme and thus nominal prices, but as Issac Newton stated: "what goes up must come down", and the global credit bubble is no exception.

The Dow Most people see:

The REAL Bear market in stocks: