Monthly Inflation 1872-2013: BLS vs. ShadowStats | TMO
…Inflation doesn’t matter. Food stamps are a sign of prosperity. Down is up. Orwell would be proud of our financial press….
The Dow has now reached a new peak. The media is prancing up and down like a giddy school girl as if this had a significant impact on the bottom line for most Americans. Don’t let the details out that many companies have increased their bottom line by squeezing wages and cutting worker benefits. Yet the mainstream press can’t even get one thing straight with inflation. The Dow is actually down 11 percent from where it was in 2000 adjusting for inflation. After all, a dollar is only worth as much as it can purchase in the economy. The US dollar has been hit over this period as well. Real household wages are back to levels last seen in the mid-1990s. So the Dow “peak” is really more symbolic and many Americans realize this. Let us take a look at where the stock market stands today through the lens of inflation.
Inflation erodes stock gains. The Dow really isn’t the best indicator of overall stock performance since it only follows a small number of companies. These are handpicked companies and the track record isn’t perfect. After all, they even had AIG and Citigroup until a few years ago. A better measure would be the S&P 500. The S&P 500 adjusting for inflation is down in real terms about 26 percent from the peak reached in 2000… via My Budget360…