Thursday, May 07, 2009

Updated TMS adjusted real S&P, real GDP

Below are the TMS adjusted S&P 500 and GDP. The S&P data is adjusted for dividends. Sadly, the returns are still quite poor, but they do reflect store of value that equities are supposed to reflect. On the other hand, if you bought near the bottom of the most recent drop, you are likely to see returns that are above the historical average of returns. We last saw relative values like this in the 70s and early 80s before the huge productivity boom brought on by computing power. Who knows if there is a huge productivity boom coming soon that will bring about an increase in real wealth in the near future? What can be counted on is that the Federal Reserve thiefs will inflate away any of that productivity through issuance of new credit.

Real GDP is declining despite the fall in prices of commodities. The US has been getting poorer for the last 20 years. Thank you wage arbitrage, 2 wage earner households, and Mr. Greenspan for enacting policies that make the average American poorer.

No comments: