Free Republic

Yes Betty, we can dream.

Now that algore has established this fund he has created a way for Regulators to track what is certain to be a massive pump and dump scheme.

last chance for you.

Your $10,000 in 2003 bought you $12,400 worth of stuff that was made in other countries.

Your 47% gain in 2008 equals $14,700 which buys you $10,437 worth of stuff that was made in other countries.

That is a 15% reduction in buying power.

You have no clue.

good bye

I never said inflation was up 30% from 03 to 08.

The dollar is DOWN over 30% from 03 to today.

The only reason the FED has been cutting rates is to rescue the banks and to help folks refinance out of adjustable rates mortgages. Those lower rates have added fuel to the declining dollar. Meanwhile, it has not stopped inflation.

The easiest way out of this mess is for the US to launch an aggressive program of oil recovery, and I mean NOW !!

Oil is the greatest factor driving costs in our economy.

The dollar could very well be at a bottom, I closed my EUR/USD long position after the Bear Sterns mess. If there are more shoes to drop in this credit crisis the bottom has yet to be seen.

I NEVER said US purchasing power was down 50%.

It's down approx. 30%.

Yes, you are correct about the Yuan in one sense, but it's more accurate to say that it's loosely traded and strongly pegged as a result of agreements between both governments.

I added them together because inflation and the value of the dollar against the trade weighted index are two different things that effect your buying power.

It’s clear, the confusion is on your end.

Try to live one day without buying or using something that was made outside of this country.

I did not equate inflation with currency fluctuations.

Dude

You have no clue.

see ya

No mistake on my part.

I thought I explained it pretty well, however next time I’ll have to keep in mind who made be reading this.

Thanks,

Take the Dow at 8500 in 2003 times the value of the dollar against the trade weighted index (see chart in OP) 1.24 equals 10540.

With the Dow currently around 12500 times the dollar at .71 equals 8875.

8,500 X 1.24 = 10,540 (Dow in 2003)
12,500 X 0.71 = 8,875 (Dow in 2008)

That's a decline of 1665 points. Keep in mind this is measured in 2003 dollars vs. today's dollars.

1665 div. by 10540 = 15%

Sorry, but I don't have the inflation adjustments to numbers above, but I have seen the data and charts that show the markets break even over the last ten years adjusted for inflation. That's the Dow at 8500 at the beginning of 1998.

So, with inflation adjustments we are going to be down about 30%.

The issue I have is that the Wall Street talking heads in the media and through their sales arms (read mutual funds) continue to tell folks to buy and hold, everything is fine, when in fact our buying power from the so called bull market has gone down.

Either way it doesn't matter since valuations are a relative thing. The only thing that matters is how much money you have at the end of the day.

The problem I have is that the so called Wall Street experts and advisors will continue to tell the public to buy and hope, I mean hold.

I'm not sure who your referring to when you say that “most countries we buy from” haven't allowed the dollar to drop. If your suggesting China, then you need to realize that the Chinese Yuan is PEGGED to the US dollar. The Dollar index in the chart above contains our largest trading partners that have a floating currency.

At some point those countries holding US Dollars will find it in their best interest to support the US Dollar or watch their dollar denominated assets lose more and more value.

So, when you do the math, since 2003 (after the bubble) the Dow is actually down over 30% in constant dollars (adjusted for inflation and deflation).

And again, the only thing that really matters is how many dollars you have AND what you can buy with them.

Everything is cyclical.

While in theory this is correct, but unfortunately it hasn't played out that way.

The US Dollar hit a high against the dollar index in 2002 at 1.24 and is now at .71. (see chart above, last one on the right)

Our trade deficit has gone from ~423 billion to over 700 billion during the same time period.

http://www.census.gov/foreign-trade/statistics/historical/gands.txt

One more thing that most folks do not realize is that the stock market measured by the Dow Jones industrial average has gone from ~8000 at the start of 2003 to over 13,000 which on the surface looks like a 60% total return.

You may in fact have 60% more cash in your pocket, however, when you go to spend that money it is worth substantially less.

There was a recent Wall Street Journal article about how the S & P 500 is actually break-even over the last ten years when you account for inflation.

The reality is, in constant dollars, you are buying less of everything from milk to oil and everything in between.

I would challenge anyone to go through their day without buying or using something that wasn't made in another country. Your blue jeans go through 6 or 7 different countries before we buy them here.

It is great !!

Richard Dawkins - Beware the Believers

http://youtube.com/watch?v=eaGgpGLxLQw

It probably deserves it's own thread.

>>>>Wall Street is nothing but S##t these days. The people are all Nancy Boys answering phone calls from their wives all day long. The real “Men” have all left. No more Steaks and drinks at lunch. No more telling it like it is. >>>

I completly agree !!

This came out less than a week ago.

Snip

Bear Stearns, the second-biggest underwriter of mortgage- backed bonds, tumbled $7.78, or 11 percent, to $62.30, its steepest drop since October 1987.

``There’s an insolvency rumor and concerns on liquidity, that they just have no cash,’’ said Michael Mainwald, head of equity trading at Lek Securities Corp. in New York.

There is no truth to the rumors, Russell Sherman, a spokesman for New York-based Bear Stearns, said in an interview. Greenberg, the former Bear Stearns chief executive officer and current board member, told CNBC that liquidity rumors are ``totally ridiculous.’’

Snip

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLfPUBmFk.bA

Also, something to consider:

We have the illusion that our human bodies are solid, but they are over 99.99% empty
space.

If an atom is blown up to the size of an entire football stadium, the dense part of
the atom would be comparable to the size of a single grain of rice placed on the 50 yard
line. Now why is that important? Because in an atom, the nucleus accounts for 99.99%
of all of the matter or mass. Atoms are mostly made of space

Looking for the source..............

Now, we can look at a given volume.. and it’s been shown that there is still “something” there.

http://en.wikipedia.org/wiki/Zero-point_energy

All quantum mechanical systems have a zero point energy. The term arises commonly in reference to the ground state of the quantum harmonic oscillator and its null oscillations.

In quantum field theory, it is a synonym for the vacuum energy, an amount of energy associated with the vacuum of empty space. In cosmology, the vacuum energy is taken to be the origin of the cosmological constant. Experimentally, the zero-point energy of the vacuum leads directly to the Casimir effect, and is directly observable in nanoscale devices.

There is no such thing as nothing.

For every outside there is an inside. For every inside there is an outside. You can’t have nothing without something.

Maybe it’s just a limitation of the english language, but I don’t think that is the case.

I found this very very interesting:

Nanocosm

http://www.amanet.org/books/catalog/081447277X_intro.htm

The wise man looks into space and does not regard the large as too large nor the small as too small, for he knows there are no limits to dimensions.
— The Upanishads

snip

A common computer screen saver called Star Fields projects white dots onto a black background. The dots emerge from screen center and accelerate out toward the edges; looking at them, you feel you’re gazing out a starship’s forward viewport. If Star Fields were real, you would have to watch that screen for eighty years just to fly by every star in the Milky Way. And there are, by best estimate, as many galaxies in the uni­verse as there are stars in our mid-sized galaxy, a trillion or so. That’s 1,000,000,000,000,000,000,000,000 stars altogether; eighty trillion years of Star Fields. Scale matters

snip

You may not realize, however, that even this galactic macrocosm pales when we reverse the direction of our imaginative voyage. All we need to do is turn inward rather than outward, and peer with ever-higher magnification into the world of the small. The traditional Chinese conception of our everyday world is exact. It is ch’ung k’uo, the middle kingdom. It, and we its inhabitants, are poised delicately between the unimaginably immense and the unimaginably minute.

snip

To illustrate: The number of stars in our galaxy is less than half the number of cells in an adult human body

snip

Below the microcosm comes creation on the scale of the nanometer, one millionth of a millimeter. I call this the nanocosm. It is a finely detailed, completely structured cosmos, or organized universe, that exists around and within us. All that is—microbes, humans, planets, stars, totality—is built up from the nanocosm, atom by atom. This subworld is as varied and complex as any other level of being: a place unto itself. Its rules are neither those of galaxies nor those we see within the middle kingdom. This simple truth has puzzled many a would-be nanotechnologist

snip

What Einstein said is true: The laws of physics are everywhere the same. At the same time, while basic laws don’t change, their appearance can be wildly variant. Science and engineering get into trouble when they forget this. In fact, most of what they call “physical law” is not irreducibly basic. It’s a jumble of empirical summaries, rules of thumb, and ad hoc adjustments that, just, well, work. Even quantum electrodynamics, whose predictions about the sub-nanocosm have so far proven accurate to 18 decimal places, uses a “normalization procedure” that cleans up bad data mathematically. When I took engineering, we called this type of thing Cook’s Constant. High-energy physicists don’t know why normalization works. Even its inventor could never explain it, which cost him no end of grief.