I’ve done this analysis before in the past and while most people look at the stock market strictly in nominal terms, I still believe it’s always important to have perspective in terms of its value in other currencies. With the move lower in gold (another currency) today to a two week low and the S&P’s around 1235 after yesterday’s selloff, the S&P 500 priced in gold terms is at the exact same level seen on March 6, 2009 when the SPX cash hit 666 intraday. Then, one ounce of gold bought 1.41 times the SPX and today it does as well. Money printing and the debasement of fiat currencies can cover up many ills and make things look better than they really are in terms of purchasing power.
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