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The Dow Jones Industrial Average has had tremendous
nominal growth since bottoming in March of 2009. Although the Dow has risen
to over 12,000 it is important for investors to keep in perspective that
nominal point gains of the Dow don't necessarily
mean stock investors have increased their overall wealth and purchasing power
versus other asset classes.
Here at GoldSilver.com, we don’t compare
stocks to dollars as we know that monetary inflation simply gives one the
illusion that nominal prices are the same as increases in value, this is not
always so.
Investors must understand that an investment's
nominal prices can climb even while its overall value versus other asset
classes may drop. Point in case ---> Silver!
If we actually look at the Dow Jones in ounces of
silver, we see that the Dow Jones Industrial Average has been spiraling
downward in value since 2001.
Currently to buy 1 share of the Dow it takes less
than a mint case of 500 US silver eagles!
 
In a span of 9 years the Dow has dropped below 500
oz per share from a high of above 2500 oz per share.
We expect this trend to continue with the Dow silver
ratio further shrinking to even lower levels in the coming years.
We now must begin to ponder the following
question:
Mike
Maloney
GoldSilver.com
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