The Inflation Adjusted Dow! Holy Freakanomics!

This is nuts. I never considered such a thing.

Look at the way the stock market appears to stay in a stable horizontal range from 1965 to 1982 when in fact it is getting beat down when the price level is adjusted for inflation. That is awesome. Frighteningly awesome. Take a look at the market top of early 2000 and the recent top of late 2007. Everybody knows the market went up higher in 2007, but in reality it was only making a double top when the price levels were inflation adjusted.

Don't stop there. Look at the next guy's explanation about governement warpage in the inflation figures. That Fred guy claims that the numbers have been monkeyed with, and his chart shows that the recent high in 2007 wasn't even a double top! Fred is showing us that the highest level on record is actually a lower level when adjusted for inflation and the geometric weighting formula used by the government. Whatever geometric weighting is.... it's awesome! Frighteningly awesome!!

I'm now expecting a massive prolonged world economic pain cycle. The idea that the numbers are constantly deceiving us while our money becomes worth less and less is almost too much to handle. No wonder the stocks hit an all time high. The money they are denominated in is hitting an all time low. I wonder who Pete Rose would be betting against.

Dow 4000, well that is the lowest Bear forecast i've seen by anyone with enough skill to post a guess on the internet.

I looked into CD rates last week and the best I could get was 1.60% for a 12 month lock in. Dividends are still beating that at the moment.

Originally posted by Bordon81
Dow 4000, well that is the lowest Bear forecast i've seen by anyone with enough skill to post a guess on the internet.

I looked into CD rates last week and the best I could get was 1.60% for a 12 month lock in. Dividends are still beating that at the moment.

Actually I used to work as an analyst for GW Joynsons and have an excellent track record.

I am convinced that a giant head-and-shoulders is forming on the Dow and has been since approx 1st January 1996. When inflation is taken into account, it creates a double top in effect.

The BIG CRASH will come, I believe before the end of May 2010, probably well before the end of March 2010. This will richocette the Dow off about 5500, briefly to about 7250 and then, within days as banks and pension fnds collaspe, back down to 4000. By end of year, 780 is likely.

For me, there are a whole host of likely triggers around... Israel/Iran etc, but the biggest is the nasty one that no-one generally sees. Just as in 1987, the collapse of the Dow was triggered by the London collapse, so too will the collapse come from offshore for the Dow - I beleive from the same source. Gordo Brown's pathetic attempt to be re-elected will result in a "giveaway" budget on 17th March or 24th March 2010.