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S&P 500 AND THE DOW JONES INDUSTRIAL AVERAGE HIT ALL-TIME LIES!



It's another Friday and media propagandists everywhere have told yet another record lie.



Countless teleprompter readers and countless keyboard jockeys are singing the praises of record dollar closes in the S&P 500 and the Dow Jones Industrial Average.

In actual buying power, which is what counts, both the True S&P 500 and the DJIA are off all-time highs, way off. The True S&P 500 hit an all-time high way back on August 28, 2000, when the S&P closed at $313.35 in True Dollars™.

In reality, the True S&P 500 hit the all-time high a whopping 5,045 days ago! Said another way, that is 13 years, nine months and 24 days ago, or roughly 720 weeks ago since anyone can claim rightfully any talk about all-time highs.

Today, the True S&P 500 closed at $160.18, or 51.1% of its all-time high. From the August 28, 2000, peak to the March 3, 2009, low, the S&P 500 fell a whopping -69.1%, falling at an annual rate of -12.8%.

From the March 3, 2009, True Dollar™ low of $96.82 until now, the True S&P 500 has risen 65.4%, growing at an annual rate of 9.9%. That annual growth seems impressive until one discovers that $1.317 trillion dollars worth of cash and deposits have been created by Federal Reserve bankers through monetizing of new debt incurred by the U.S. Congress on behalf of taxpayers now and long into the future. Said another way, Fed Res bankers have overseen an eye-popping 93.5% growth in cash and deposits since the March 2009 low.

In the 20 years between January 6, 1975, and December 5, 1994, total cash and deposits grew 308.6%, growing at an annual rate of 7.3%. During that time, the True S&P 500 grew 50.7% growing at an annual rate of 2.0%.

Between December 5, 1994, and the all-time high hit on August 28, 2000, the True S&P 500 grew 261.9% growing at a blistering rate of 25% a year. Likely surprising to many, over those 2,094 days, or 5 years, eight months and 24 days, cash and deposits fell -6%, falling at an annual rate of -1.1% and leaving cash and deposits $69.7 billion less than before the start of the run.

In, True State of the Union: Wage-Earners' Income and Taxes, I show during that 1994 and 2000 stretch, as a percent of GDP, true private wages rose. As well, true average income rose, employment incidence rose and hit an all-time peak, and true individual taxes as a percent of GDP rose, nearing the all-time high.

Buying power matters. When output rises and instruments of buying — cash and deposits — fall, living betters for most.

Denominational stock prices don't matter much. True stock prices always matter.

From December 1994 to the August 2000 all-time high, True GDP grew at an annual rate of almost 6.4%, growing a full 54.2%. From the March 2009 low until the end of Q1 2014, True GDP has fallen at the yearly rate of -9.7%, falling a full -41.5%!

It should be clear that not only does quantitative easing not work, but engaging in quantitative easing proves to be destructive. Quantitative easing harms any economy.

During the Clinton Good Times, Federal Reserve Bank Units (FRBUs) of cash and deposits fell! During the Obama Hard Times, because of the efforts of debauched, squandering Congressmen and Fed Res bankers, FRBUs have risen to recklessly.

The purpose of cash is to do the work of money, if money existed. The purpose of money is to settle contracts, specifically to extinguish debt.

As money only ever is coined metal by weight and fineness, money has not existed for most Americans since 1933. As cash is evidence of deposits circulating in perpetuity, cash cannot extinguish debt.

The purpose of credit is to bring forth production into the now on expectation of future profits.

When production of property (right of ownership) in the pursuit of profit in purchases and sales, or trade is efficient, trade betters the lives of all. In the end, anyone wants stuff as wealth. Cash acts as a stand-in, a claim against future stuff of wealth. Credit acts as a stand-in for future profit.

Making cash and credit less efficient weakens any economy. That is what Quantitative Easing does. Ben Bernanke has wrecked the U.S.A. like no enemy ever could. His successor, Janet Yellen is bent on following in Bernanke's footsteps.

Those of the Federal Reserve don't understand banking, credit, money, cash at all. Thus, they do not understand trade.