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Tuesday, February 15, 2011

Check out Philip Davis' Latest Post on Seeking Alpha.

Among the many useful, if not provocative, tidbits he provides is a pointer to the MIT Billion Prices Project, which offers more realistic inflation info than the B(L)S, and shows that the U.S. has experienced over 2% inflation just since Christmas. 

And what of the concurrent rise in the Stock Market ? Davis responds...
The rising tide of inflation can certainly lift all market ships. Of course we’re ignoring the relative value of stocks to real inflation but that’s a deep kind of discussion we have with Members over months, not in two paragraphs of a morning post. As a quick example, check out the S&P 500 priced in gold since the crash. If we assume gold is a real hedge against inflation and the real value of a dollar, then U.S. equities are STILL down 41% off the highs with a DECLINING 200-day moving average. In other words, we are losing ground to inflation and currency devaluation with our market plays

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