Another view, DOW 3000 or DOW 12,200?

[nickel]

Quote:

Originally Posted by dex I wonder if you adjusted for inflation from the high of 1929 would the Dow be up or down. My guess is that it would be down.

Not sure if this is exactly what you're asking, but according to this inflation calculator:

The Inflation Calculator

$381 in 1929 (this was where the Dow peaked) was worth $4573.31 in 2007. So based on that conversion, the Dow is clearly up by a good bit since the peak of 1929, even accounting for inflation.

[RockOn]

Quote:

Originally Posted by nickel Not sure if this is exactly what you're asking, but according to this inflation calculator: The Inflation Calculator $381 in 1929 (this was where the Dow peaked) would be worth $4573.31 in 2007. So based on that conversion, the Dow is clearly up by a good bit since the peak of 1929, even accounting for inflation.

thus the "real rate of return" that stocks historically provide, comes in spurts though

[Marquette]

Quote:

Originally Posted by RockOn comes in spurts though

I heard Bernanke is working on a pill for that, though.

[FIREd]

Quote:

Originally Posted by RockOn So making it easier for everyone and anyone to trade causes markets to become priced beyond what fundamentals support? Think of the implications for stock market pricing, $4 trades and all (some offer free trades).

Well just a few years ago if you wanted to own corn or wheat, you had to build a big silo and ask the nearest farmer to provide you with the commodity. If you wanted to own oil, you could always build a big underground tank and have the black gold delivered directly to your property. In other words: not very practical. But now, we can all own commodities with the push of a button via ETFs. No storage. So a lot more people and institutions have been able to invest in commodities and drive the price up. Think about pension funds investing even a small portion of the trillions of dollars they manage into commodities and how the price of those commodities can be affected. That was my point. Is the price of oil going up because we consume more and/or produce less or because of speculation? I think both. Gold is another example of commodities going up partly because of speculation in my opinion.

[RockOn]

Quote:

Originally Posted by Marquette I heard Bernanke is working on a pill for that, though.

If it stays real for more than 4 decades, call the doc.

[RockOn]

Quote:

Originally Posted by FIREdreamer Well just a few years ago if you wanted to own corn or wheat, you had to build a big silo and ask the nearest farmer to provide you with the commodity. If you wanted to own oil, you could always build a big underground tank and have the black gold delivered directly to your property. In other words: not very practical. But now, we can all own commodities with the push of a button via ETFs. No storage. So a lot more people and institutions have been able to invest in commodities and drive the price up. Think about pension funds investing even a small portion of the trillions of dollars they manage into commodities and how the price of those commodities can be affected. That was my point. Is the price of oil going up because we consume more and/or produce less or because of speculation? I think both. Gold is another example of commodities going up partly because of speculation in my opinion.

I agree. The GLD ETF might be causing demand all by itself. Yet, the whole world places a value on an ounce of gold so I'm not sure just how much the US factors you point out contribute to the gain.