Wednesday, October 06, 2010

"If things are so bad, why is the market going up every day?"

From Seeking Alpha:

The answer to that is easy - it's money printing. While it may seem that we are all richer because the market raced almost 10% higher in September, and is starting October in the same way, the truth is that because the dollar is turning into toilet paper - the value of your increased investment portfolios was offset by the loss of your purchasing power. If your investments went up 10% - those same investments afforded about 10% less goods. So all in all, it was a month of illusions to make you feel better. Take a look:
(Courtesy of

This is the S&P 500 priced in a basket of 17 commodities that most people use through yesterday. Today, that price is lower yet again. While it seemed like the stock market was making everyone richer last month, when priced in a basket of goods most people need to survive, the market went nowhere. As a matter of fact, as you can see, since May of this year, the stock market is 16% LOWER against the price of goods. The S&P 500 that you see printed in the financial news is priced in US Dollars. This is what that chart looks like:

Is it just me, or do you see anything different between the two?
This tells me there is a great fraud being committed against the American people, and its name is undercover inflation. It also makes me realize that America needs a new direction of leadership from the kind it has seen the past 30+ years since fiat currency was allowed to steal from the prudent. Make sure you vote next month with this in mind.
Finally, it tells me that things aren't as rosy as the media wants to tell you or the market is saying. For that reason, we suggest you remain as we are, "optimistically scared" when you choose investments, and own only companies who sell products people have to buy and pay dividends to you in the meantime.

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