Buy the book
Please, Sign-In: Register

Key Market Indicators

Rate Type Month Last Change
Fed Funds Rate April .25 0.0
Unemployment March 6.7% --%
Rate Type Month Last Change
Inflation (average) March 1.4% +.04%
Gold (oz) April $1,303 +$10.00
 
Item Added to Cart
 
 
Join the Community
Buy the Book
 
Print | Email | Share

Inflation v. Growth: a Picture is Worth 1,000 words

Jul 07, 2011
They say inflation isn’t a problem, or that little exists in "the market" today. They couldn’t be more wrong.
 
The difference between Nominal GDP and Real GDP is inflation. Nominal GDP is measured in current dollars, and Real GDP is measured in a prior year’s dollars (in this case 2005 dollars.)  Below is a chart comparing stock market activity to GDP from year ended 12/31/2002 through 6/20/2011 – basically the last recessionary bottom to now. 
 
 DJIA_LB_New
  
            This chart clearly shows the presence of inflation in the economy -- and in the stock market. Inflation accounts for approximately 3,000 Dow points since 2002 (85% of its gain), which coincides, not ironically, with reckless government spending and the addition of over $2 trillion of new currency injected into the economy by the Fed.  That’s why commodity prices have also risen so sharply. 
            That's inflation, not growth. 

            Here's what growth looks like. 

 
15-51LB_New
 

            15-51 portfolio construction: It is the road to financial independence.

Log In or Sign Up to comment

COMMENTS (2 Comments)

You really found a way to make this whole pcroess easier.
Cami 3:46 PM Jan 15th
 
Was totally stuck until I read this, now back up and rnniung.
Digger 3:15 PM Jan 15th
 

IBAWinnerSealJPEG

Reviews:

"A must read..." -- The Midwest Book Review

"Understandable and easily applied...totally unrivaled and backed by reliable data..." -- The Mindquest Review of Books

"The author makes an excellent case..." -- Heartland Reviews

"Well written and interesting...fact based and logical." -- Kirkus Reviews

"Proven, understandable and sensible..." -- Lightword Publishing

"As convincing as it is successful." -- CBS Connecticut

"Very crucial topic, very crucial book!!!" -- GoodReads

"Changes forever your perception of the financial landscape." -- ReaderStore



Upcoming Events

Want to Connect?  

Email Dan directly, or 

Friend him on Facebook, or 

Connect with him on LinkedIn, or

Follow him on Twitter 





Proof





 
investment book
LYB Community