Here's a fun exercise to use the POSX . I wanted to see what "real value" for DOW was when measured in USDX (POSX) versus just being measured (quoted) in USD (FRN).
When we add the USDX to charts looking at very LT prices it tells a wholly different story. We must add on the multiplier of the USDX that was correct for the time. That multiplier of the USDX changes everything because the USDX itself is always changing.
If you own assets priced in dollars (which the whole planet does) they are not really priced in dollars at all. They are priced in USDX. A dirty little fact 95% (more?) of Americans are totally UNAWARE of. However, other Nationalities outside of Americans are 95% AWARE of this little fact. Everyone But the Emperor knows he is naked and only the delusional, drugged and dopey Emperor thinks he is wearing anything. Everyone else is in on it and the proverbial "jig is up" has arrived. All we do now is keep it at bay until we figure something out. What will the world do once the Emperor realizes, and admits, he is naked?
For me I have figured out gold. If I am wrong I will still be much less wrong than most other people who made no move.
12000 DOW with a USDX at .88 = 10560. This is the USDX weighted price for the DOW back in 2008 when the DOW was at 12K and the USDX was at .88. Its USDX weighted value was 10560.
12000 Dow with a USDX at .73 = 8760. The DOW at 12K now and the USDX at .73 gives a USDX value of 8760 weighted dollars.
Since the last time the DOW was at 12K, back in '08, until now when the DOW is once again at 12K (3 years on and trillions poured over) its "value" has lost around 20% of its worth when measured by the true purchase power of that value.
I hope I explained this well. It is hard to articulate on paper versus talking. Sorry. http://stockcharts.com/def/servlet/SC.pnf?c=$USD,P&listNum
Also applied to POG:
POG in 2008 at $800 with USDX at .88 = 704 weighted value.
POG today at $1500 with USDX at .73 = 1095
So while we see that the DOW lost 20% in USDX terms above, over the same time span the POG rose by 25%. Impressive and hard for even the most well argued DOW bull position could show how owning the DOW has been even close to a winner let alone better than PM.
Hard not to like gold's chances going forward if this is how gold has acted so far, under a deeply controlled and supposedly strength building period of low or no inflation.