The DOW has NOT set new records

The DOW has NOT set new records

The so-called economic recovery supposedly is shown by the Dow Jones Industrial Average hovering around the 16,000 mark, the highest ever. It’s just below that number as I write.

In fact, adjusted for inflation, the DJIA is the same as it was 12 years ago. As other numbers have indicated, such as median household income, there has been no economic progress for more than a decade, since the late Clinton-Gingrich years.

The economy has stagnated under the anti-free market policies of Republican President Bush, Democratic President Obama, the Republican and Democratic congresses of their years; and under the inflationary policies of Fed chairmen Greenspan and Bernanke, both Republicans.

Here’s the DJIA adjusted for inflation:

DOW chart of the day, Nov. 20, 2013


Notice, also, the strong growth from the Reagan tax cuts, which fully took effect in 1983, through the Clinton-Gingrich tax cuts of the late 1990s.

The country isn’t going to prosper again until: 1) The dollar is returned to stability, pegged to gold; with interest rates 2 percent above inflation (instead of 0 percent now). 2) Taxes are cut back to 1980s levels. 3) The hyper-regulations of the Bush-Obama years — Sarbanes-Oxley, Dodd-Frank, Obamacare — are repealed.

Freedom produces prosperity. Government expansion produces only stagnation.

25 comments

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  1. Rex the Wonderdog!
    Rex the Wonderdog! 20 November, 2013, 12:38

    As other numbers have indicated, such as median household income, there has been no economic progress for more than a decade, since the late Clinton-Gingrich years.

    We are far off of the best years for the middle class, 45-70. They wont be coming back, and we will eventually breakdown, in fact we are right now. This 7 year depression proves it (start 4th quarter 2007)

    Reply this comment
  2. LetitCollapse
    LetitCollapse 20 November, 2013, 13:14

    The Republican and Democrat team members won’t even refuse to raise the debt ceiling. How would you ever expect them to peg the dollar to gold, cut taxes to the 1980s levels or any of the rest?

    The stock market has turned into another asset bubble. It’s pretty obvious what’s driving it. Trillions of QE and buying back Treasury Bills and the continuing massive bailouts for US corporations. Without the massive infusion of fiat dollars into the system your GDP would be deep into the negative numbers. There is absolutely NO QUESTION about that. It’s undeniable. Americans equate national financial health with stock market indices. That is how stupid your average American is. Not intended to offend. Just stating the facts. I refuse to protect any group, ideology or political affiliation if it interferes with the truth.

    You see, manipulating interest rates by artificial suppression @ 1%-2% is a zero sum game that really destroys the incentive for capital formation – the necessary ingredient that builds a nation economically long-term. And the longer it goes on – the worse it gets.

    For every person who gets a lower interest payment – another gets lower interest income. When you destroy interest income you destroy the incentive of capital formation that can then be lent out to build more capital. Sure, low interest rates are great for a home owner or buyer with a mortgage. But think in terms of the entire economy. Perpetually and artificially low interest rates set the system up for future financial and economic calamity. That is the reason interest rates are supposed to float up and down in compliance with the natural laws of economics. When held artificially low (or high) for extended periods – damage ensues – just like damage ensues to your body if you drink 4 liters of sugary soda pop every day. Eventually you will pay a huge price for your artificial elevation of blood sugar levels. Organs start to fail. The economy is no different. These are NATURAL LAWS and when violated for extended periods – the system begins to fail.

    I don’t know how long it will take. But mark my words. We are in for a big fall.

    Reply this comment
    • John Seiler
      John Seiler Author 20 November, 2013, 15:23

      Collapse: My article did not “expect” the politicians to do anything. It merely prescribed.

      Reply this comment
      • LetitCollapse
        LetitCollapse 20 November, 2013, 17:27

        I understood your point and that it was your personal antidote for the failing economy, John. Your hope is that our leaders would implement such advice. But both of us know that would never happen in a million years, evidenced by the fact that our collective representatives (dem and republicans) won’t even address something as elementary as the debt ceiling. In fact, I’ve read that they are trying to finagle a new law that would make debt ceiling increases AUTOMATIC versus requiring a congressional vote. From bad to worse.

        Btw, I do agree with your antidotes as a partial solution to the immense financial problems in America. I am a little standoffish on returning to the gold standard right now. There are many pros and cons. But in desperate times we may need to take desperate actions.

        Reply this comment
        • John Seiler
          John Seiler Author 20 November, 2013, 18:51

          Inflation always is wrong because it destroys a money’s value. Just since Nixon took us off the gold standard in 1971, when I was 16, the dollar’s value has dropped from $35 an ounce to $1,247 today. Gas cost 31 cents that year; now it’s $3.35 today. Look at your grocery store. The prices keep going up. The gold standard always is good because it preserves value. It’s a “unit of account,” like a yardstick. Making a yardstick 72 inches long wouldn’t double the height of your house. It would just confuse you.

          Reply this comment
          • LetitCollapse
            LetitCollapse 20 November, 2013, 20:29

            Again, there are good arguments on both sides here.

            The biggest problem with the gold standard that I’ve heard is that we produce a very small % of total world gold output in America. Most is produced in Africa and Asia. And those who control the bulk of the supply of a commodity upon which the value of your currency is based really controls the very sovereignty of your people. A gold based currency can be manipulated as effectively as a fiat based currency if you have crooks or cartels controlling the supply of the gold – just as crooks or cartels (gov) can control the fiat money supply with printing presses, QE or what have you. Now, if most of the world’s gold production originated in the US, I wouldn’t hesitate to endorse the gold standard. If push comes to shove we could always get rid of the Fed. But how do you get rid of a gold market cartel in South Africa or China that’s manipulating the price of your currency to undermine your economy? Bombs? That would only lead to bigger problems in a nuclear age. But there are good arguments in favor of the gold standard too. It’s a tough one.

            The bottom line is that if you have gov financial managers with integrity who act in the interests of their citizens to keep prices stable and promote sound economic output and growth through responsible fiscal and monetary policies – your economic future is secure.

            But when crooks rule the roost – in either a gold standard system or in a fiat currency system – you’re screwed. Either way.

          • John Seiler
            John Seiler Author 21 November, 2013, 09:56

            Actually, you don’t need to hold gold to have a gold standard. You just peg the currency to it. It’s just like you don’t need to own 1,000 yardsticks to measure 1,000 pieces of cloth you might buy.

            In any case, the global market in gold is now so vast that it’s stable long term. It can’t be manipulated. Even a big surprise influx of gold, such as when the Spanish looted the Indians’ gold (which caused massive inflation in the 16th Century), probably wouldn’t phase the market.

            The point is that a mostly stable commodity that’s almost entirely used only as a store of value is much better as a “unit of account” than fiat currencies manipulated by bankers and governments.

            Best of all: We should be freed to use whatever currency we wish. If you want to be paid in dollars, so be it. I would prefer gold, or a gold-backed currency. Of someone else could prefer Swiss francs or yen or euros.

  3. NTHEOC
    NTHEOC 20 November, 2013, 15:41

    Dyspeptic says,
    I don’t know how long it will take. But mark my words. We are in for a big fall.
    —————————————
    Lol!!!! Right from the school of chicken little economics! You are the ultimate DOOMER huh Dys! California is BOOMING in all areas right now!!!!!!

    Reply this comment
    • LetitCollapse
      LetitCollapse 20 November, 2013, 19:28

      It’s sort of difficult to engage in a rational discourse with someone who can’t even get the name of the poster who he’s replying to right.

      Reply this comment
    • Dyspeptic
      Dyspeptic 22 November, 2013, 11:59

      “Dyspeptic says, I don’t know how long it will take. But mark my words. We are in for a big fall.”

      Dyspeptic didn’t say anything of the kind. Let It Collapse wrote that. Quit misquoting me.

      WHAT’S INTERESTING ABOUT THE MISQUOTE IS THAT IT PROVES HOW MUCH I LIVE, RENT FREE, IN YOUR POINTY BUREAUCRATIC HEAD. THERE IS A LOT OF EMPTY SPACE IN THERE TOO!

      Reply this comment
  4. Ted Steele, CEO
    Ted Steele, CEO 21 November, 2013, 07:49

    LOL— The doomer drama continues! “in for a big fail”? LOL like every other market correction of course………..zzzzzzzzzzzzzzz

    Reply this comment
    • Dyspeptic
      Dyspeptic 22 November, 2013, 11:22

      Theodore, please analyze the above chart and actually process the information before commenting. Try to stick to facts instead of the usual knee jerk snark.

      If this website is so “zzzzzzzzzzzzzzzzz” for you why do you keep reading and commenting?

      Reply this comment
  5. Ulysses Uhaul
    Ulysses Uhaul 21 November, 2013, 10:28

    Rex…America will come back. Spike your Slurpee and relax…..feel for ya little fellla..

    Reply this comment
    • Dyspeptic
      Dyspeptic 22 November, 2013, 11:23

      Do they still sell Slurpee’s at the Stop & Rob? From what I remember they could use a little Vodka.

      Reply this comment
  6. Queeg
    Queeg 21 November, 2013, 10:44

    You all know I work hard in Ulysses Uhaul’s rental yard. He set me up on a doomer moving bonus program funding my stock based retirement accounts.

    The current run of the market is papered value to counter balance world wide inflation. To play the game is a precarious undertaking. If you cannot beat globalists, you may consider joining them.

    Reply this comment
  7. NTHEOC
    NTHEOC 21 November, 2013, 15:26

    New reports out show California is BOOMING!!!!!!!! Lol, The sky is falling,the sky is falling!!!!! And on the next episode of Doomsday preppers, letitcollapse,dyspeptic,and john seiler.

    Reply this comment
    • John Seiler
      John Seiler Author 21 November, 2013, 16:32

      Read the report. It cautions that, if another recession hits, then the surpluses vanish quicker than you can say dot-com boom.

      Reply this comment
    • Dyspeptic
      Dyspeptic 22 November, 2013, 11:39

      “California is BOOMING!!!!!!!!”

      Yes, just like before the last bubble burst in 2008. See a pattern there chump?

      Every day we are lied to by the Plutocratic elites and drones like you lap it up. The stock market is not at all times highs but they keep telling us it is. Just like they keep telling us “You can keep your insurance/doctor if you like them.

      Why don’t you go back to your taxpayer funded porn surfing and Kool Aid drinking and leave reality to the adults?

      Reply this comment
  8. NTHEOC
    NTHEOC 21 November, 2013, 15:33

    By LAURA OLSON / ORANGE COUNTY REGISTER
    SACRAMENTO – California’s financial outlook is rosier than it has been in years, with a report released Wednesday projecting that state coffers will hold a larger-than-expected surplus by the end of the fiscal year in June.
    —————————–
    Hahahaha!!!!!!!!!!! Oh my the Doomers need to come up for some air!!!!!!!!

    Reply this comment
    • John Seiler
      John Seiler Author 21 November, 2013, 16:31

      Read the report. It cautions that, if another recession hits, then the surpluses vanish quicker than you can say dot-com boom.

      Reply this comment
      • LetitCollapse
        LetitCollapse 21 November, 2013, 23:58

        If the interest rates rise to a mere 7% (historical average) it all comes tumbling down. All the asset bubbles go ‘pop’.

        And there is no more real bailout money left. Only the fake stuff that pushes interest rates higher and higher, contrary the will of the puppet masters.

        IF (?) another recession hits? What an understatment.

        Reply this comment
  9. Ulysses Uhaul
    Ulysses Uhaul 22 November, 2013, 10:05

    Could a TIME MACHINE be installed back dated before Collapse’s depressing doomer posts.

    We need relief already……your head could go poof!

    Reply this comment
  10. Dyspeptic
    Dyspeptic 22 November, 2013, 11:49

    Thanks for this post John.

    Every single day we are inundated with news that the stock market is at all time highs. Your chart proves what intelligent and skeptical people already know. The media Plutocrats are systematically deceiving us about that. Anyone with intellectual curiosity and integrity would wonder what else they are lying to us about.

    P.S. The chart shown above probably underestimates the quagmire we are in because it most likely low balls the real inflation rate.

    Reply this comment

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