Ghost
12-11-2008, 01:48 PM
I'm starting this thread because I have been worried about this for a long time, and I'm interested to talk to anyone who knows anything or is interested. There are lots of folks here who seem to know a lot about economics, and any pooling of knowledge is appreciated.
One basic driver behind my thinking is that I have heard that of the total number of dollars that exist, somewhere between half and two thirds have been created in the last 3 months or so. (Anyone have any good data on this?) It scares me.
Obviously, when a company decides to double or triple the number of shares of its stock, the stock immediately goes to half or a third of its prior value. With the dollar, I would expect the same thing to be true in the longer run, just without being immediate, since the effects are hidden for a while until the ripples get out.
Not that it matters, but what triggered my thinking today was starting to see what seemed to me like perhaps a real uptick in gold along with bouncing stock markets with extremely bleak jobs news. This matches what I would expect to see with a falling dollar. (Gold outpacing the overall market and stocks, stocks maybe doing well relative to the dollar, at least good stocks, but fighting against a bad market for business.)
The thinking being that gold prices are a direct dollar hedge--dollars get worth less, gold prices climb--all prices climb, really. So the same force acts o increase stock prices, except that the overall economy is doing so poorly, so the outcome is mixed.
Anyhow, I don't know if any particular news of today really reflects this yet, but it tripped my head to start what might be a long term thread about this. I'm interested in anybody's thoughts or data. I have seen from other threads that some folks here do a lot of financial reading, as well as knowing a lot to begin with.
Regards,
Mike
One basic driver behind my thinking is that I have heard that of the total number of dollars that exist, somewhere between half and two thirds have been created in the last 3 months or so. (Anyone have any good data on this?) It scares me.
Obviously, when a company decides to double or triple the number of shares of its stock, the stock immediately goes to half or a third of its prior value. With the dollar, I would expect the same thing to be true in the longer run, just without being immediate, since the effects are hidden for a while until the ripples get out.
Not that it matters, but what triggered my thinking today was starting to see what seemed to me like perhaps a real uptick in gold along with bouncing stock markets with extremely bleak jobs news. This matches what I would expect to see with a falling dollar. (Gold outpacing the overall market and stocks, stocks maybe doing well relative to the dollar, at least good stocks, but fighting against a bad market for business.)
The thinking being that gold prices are a direct dollar hedge--dollars get worth less, gold prices climb--all prices climb, really. So the same force acts o increase stock prices, except that the overall economy is doing so poorly, so the outcome is mixed.
Anyhow, I don't know if any particular news of today really reflects this yet, but it tripped my head to start what might be a long term thread about this. I'm interested in anybody's thoughts or data. I have seen from other threads that some folks here do a lot of financial reading, as well as knowing a lot to begin with.
Regards,
Mike