{"id":55732,"date":"2014-08-10T12:40:15","date_gmt":"2014-08-10T16:40:15","guid":{"rendered":"http:\/\/countingpips.com\/?p=55732"},"modified":"2014-08-10T12:40:15","modified_gmt":"2014-08-10T16:40:15","slug":"silent-crash-why-the-real-value-of-the-dow-jones-industrials-matters","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/08\/silent-crash-why-the-real-value-of-the-dow-jones-industrials-matters\/","title":{"rendered":"“Silent Crash”: Why the Real Value of the Dow Jones Industrials Matters"},"content":{"rendered":"
August 10, 2014<\/div>
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Priced in real value, the Dow has collapsed 84% since 1999 <\/span><\/h3>\n

By Elliott Wave International<\/span><\/h3>\n

Stock market investors who glance at their screens see the dollar<\/strong> value of the Dow Industrials.<\/p>\n

Another way — the way Elliott Wave International (EWI) prefers — is real<\/em> value, in terms of the things you can actually buy with your Dow shares, such as real money (gold) or a basket of commodities.<\/p>\n

Clearly, one could ask: “Why is the Dow priced in real value important? I buy things with dollars.”<\/p>\n

Let’s look briefly at the nominal (dollar valued) Dow vs. the real Dow. Then we can address why the Dow measured in real value matters.<\/p>\n

On July 16, the nominal Dow reached an all-time closing high of 17,138.20.<\/p>\n

The value of the real Dow is not even close. Indeed, you may be in for a shock.<\/p>

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The Dow priced in real money-gold-topped in 1999 and has collapsed 84% since then … . Had the U.S. maintained honest money, the Dow would be priced at 266 today … .<\/p>\n

The Elliott Wave Theorist<\/em>, June 2014<\/p>\n<\/blockquote>\n

Robert Prechter, founder and president of EWI, calls the collapse in the real value the “Silent Crash.”<\/p>\n

The December 2006 Elliott Wave Theorist<\/em> explains why the value of the real Dow matters. Take a look at this chart [updated in July 2008] and read the commentary:<\/p>\n

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What happens when a market declines in real terms but not in dollar terms? We have one really good example of when it happened in the past, and [above] is a picture of what was going on back in the early ’70s. If you recall, from the 1970 low to the peak in January of 1973, the Dow made a new all-time high. It went above the old high of 996 and got to 1051 on a closing basis. … There was a lot of optimism, just as there is today.<\/p>\n

But if you look at this blue line, you will see that the real value of stocks was falling during the end of that rally, and falling from a higher point way back in 1966-68. So you had declining values in real terms … with rising values in nominal terms.<\/p>\n

How did it resolve? It resolved with a collapse from January 1973 to December 1974, a 47 percent decline in the Dow, 49 percent on the S&P. In other words, the nominal prices played catch-up with the plunging prices in real terms.<\/p>\n

The Elliott Wave Theorist<\/em>, December 2006<\/p>\n<\/blockquote>\n

The set-up today is much bigger<\/strong>.<\/p>\n

Prepare now for what EWI sees ahead by reading a special report for investors just like you, titled, “The Nominal Dow: The Biggest Lie in Stock Market History.” This must-read report is 100% free. See below for more details.<\/p>\n

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The Biggest Lie in Stock Market History – REVEALED!<\/h3>\n

There’s a Silent Crash going on in the stock market right now that most investors don’t know about — but they soon will. Safeguard your portfolio now before it’s too late.<\/p>\n

As Robert Prechter says, “Bear markets always bring constricted time frames and breathtaking movements. You have to be ready for them.”<\/p>\n

Click here to read the report now and be ready – it’s FREE!<\/a><\/h3>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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Priced in real value, the Dow has collapsed 84% since 1999 By Elliott Wave International Stock market investors who glance at their screens see the dollar value of the Dow Industrials. Another way — the way Elliott Wave International (EWI) prefers — is real value, in terms of the things you can actually buy with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-55732","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/55732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=55732"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/55732\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=55732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=55732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=55732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}