Thread: Here Is Why The Dow Just Passed 13,000 - nearly $7 trillion pumped by central banks

Here Is Why The Dow Just Passed 13,000


Submitted by Tyler Durden on 02/21/2012 11:37 -0500

Wondering why the DJIA just passed 13K again? Wonder no more: as the chart below shows it is entirely due to the nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years. As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that. We would add that with the entire centrally planned ponzi scheme hell bent on preserving the illusion of nominal gains, global liquidity is now fungibly sloshing from one market to another with absolutely zero resistance whatsoever. At this rate, it should double again in 3 years, then 2, and so on. Will the Dow hit 52K in 5 years in that case? Why most certainly. Just ask any remaining citizens of the Weimar Republic. They know all too well about exponential stock market rises. They also know absolutely everything about the self-delusion that comes with chasing NOMINAL numbers. Oh, and before we forget, expressed in spot gold price, the central bank aggregate tally has moved from being the equivalent of 10 billion oz of gold, to just 8 billion. Guess what is 20% underpriced.





Here Is Why The Dow Just Passed 13,000 | ZeroHedge

As Dow Passes 13,000 In Nominal Terms, Here Is The "Real" Picture


Submitted by Tyler Durden on 02/21/2012 11:28 -0500

Three charts that perhaps will calm the nominal euphoria as Dow 13000 screams across the screens. Since May 2008, the Dow is unchanged in price and down 50% in 'real' gold terms. The picture is just as disheartening from the start of 2011 and 2012. Next stop Dow 20,000 and Gold 20,000?

From May 2008, The Dow priced in Gold is down 50% while we have nominally recovered unchanged.



From the start of 2011. The Dow is up 11.35% while in real terms it is down 12.4%...




and from the beginning of this year, the Dow is up 4.8% while in gold 'real' terms, it is down 4.25%...





Charts: Bloomberg

http://www.zerohedge.com/news/dow-pa...e-real-picture

Presenting The Biggest Tradeoff Of A Surging Stock Market


Submitted by Tyler Durden on 02/21/2012 15:38 -0500

Something funny happened on the road to Dow Jones 13,000 - the car ran out of gas, and the driver noticed what the latest and (literally) greatest price of unleaded is...



and perhaps in even clearer language...




Despite all the appearance of wealth creation in the US equity markets, the S&P buys 10% fewer gallons of gas for your car than its average since the MAR09 lows (and 20% fewer than its pre-QE1 peak) with the last few weeks of action also removing almost 10% of purchasing power even as stocks soared...

Charts: Bloomberg
(h/t Omid Malekan)

Presenting The Biggest Tradeoff Of A Surging Stock Market | ZeroHedge