The stock market is not glittering even as it approaches a new high. Why?
I remember when a friend of mine, my senior by 40 years or so, a Swedish socialist turned ardent free marketeer, and fan of Murray N. Rothbard, explained to me that the price of gold was not rising. No, it was the value of the dollar diminishing.
In the years since I have come to see that he is indeed right, for the most part. It is the reason why the Federal Reserve and the world’s central banks (the facilitators of our system of crony capitalism) are so concerned with the price of gold. The higher the price goes the more illegitimate their system looks.
Gold, though not perfect, is by far the best barometer of real value in the economy there is. This is why it is useful to price the stock market in terms of gold.
(From The New York Sun)
But what are we to make of the fact that the value of the Dow is actually lower today, having slumped to 8.38 ounces of gold from the 8.7 ounces at which it was valued on January 20, 2009?
…The value of the Dow was actually 44 ounces of gold as recently as 2000. So the drop is not small.