Priced in real value, the Dow has collapsed 84% since 1999
By Elliott Wave International
Stock market investors who glance at their screens see the dollar value of the Dow Industrials.
Another way -- the way Elliott Wave International (EWI) prefers -- is real value, in terms of the things you can actually buy with your Dow shares, such as real money (gold) or a basket of commodities.
Clearly, one could ask: "Why is the Dow priced in real value important? I buy things with dollars."
Let's look briefly at the nominal (dollar valued) Dow vs. the real Dow. Then we can address why the Dow measured in real value matters.
On July 16, the nominal Dow reached an all-time closing high of 17,138.20.
"The value of the real Dow is not even close. Indeed, you may be in for a shock. The Dow priced in real money-gold-topped in 1999 and has collapsed 84% since then ... . Had the U.S. maintained honest money, the Dow would be priced at 266 today ... ."
The Elliott Wave Theorist, June 2014
Robert Prechter, founder and president of EWI, calls the collapse in the real value the "Silent Crash." Continue reading ""Silent Crash": Why the Real Value of the Dow Jones Industrials Matters"