It feels good but…

We can put into perspective the asset inflation we are seeing in many different asset classes that has been achieved in part due to a depreciating US$ by analyzing the returns in the S&P 500 and DJIA for 2009 in terms of gold (real money as opposed to fiat). This highlights again the nominal gains we are seeing in stocks this year as opposed to real gains. In gold terms, the S&P 500 is down .7% in 2009, a far cry from the 16.9% nominal gain, as the S&P 500 buys 1.017 ounces of gold vs 1.024 on Dec 31st 2008. The DJIA in gold terms is lower by 5.7% in 2009 vs the nominal rise of 10.7% as the DJIA buys 9.37 ounces of gold today vs 9.94 on Dec 31st 2008.

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