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Is the only reason the DOW continues to climb because it is measured in US dollars?

It bothers me that unemployment continues to increase and the dollar continues to fall. If you measure the DOW using a gold standard is the stock market REALLY increasing? Is this a viable way to look at the stock market when US currency is so unstable?

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  • 1 decade ago
    Favorite Answer

    Nope..the Dow rises because of supply and demand and investors opinions about the future of the economy and the underlying stocks. All the Dow measures is the weighted prices of the 30 stocks that make up the Dow. Each stock's price goes into the mix and affects the Dow, not the other way around. If the Dow were made up of stocks in 30 weak companies, it could go down even if the market/economy was booming. The Dow itself makes for a nice news story, but better indexes as to the health of the market and by extension the economy exist - the S&P 500, S&P 1,000, Wiltshire, etc. These are broader based indexes and as such, one stock will not affect them nearly to the extent one stock can affect the Dow.

    Further, since the stocks are all measured in dollars, being on the gold standard would not affect the market pricing - stocks are being measured in a closed system (dollars only) not in a market system (dollars vs. pounds vs. euros, etc.). Thus how the dollar fluctuates against other currencies (which is what the gold standard would affect) should have no affect on the Dow directly (it may have an affect on the stocks if the underlying companies stock value would fluctuate due to foreign investment).

  • 5 years ago

    We seem to think of by potential of transforming into funds out of skinny air will shop us afloat. u.s. imho is decaying on all stages. think of approximately it. We deliver out welfare exams (stimulus exams), to objective to spice up our economic device. A united states of america that doesn't produce shall fall... What does u.s. produce? The USD is valueless and your procuring potential is dwindling...organization are all caught up in a cost adjustment war. it somewhat is why commodity communities have been so stable. We as a all and sundry is being informed lies. in reality the inflation fee is approximately 15%. The fed has no plan. they don't seem to be dumb they see the super problems. hear you could not fix a small crack by potential of pouring truckloads of money in it. The crack will become wider and so what does the fed do? they simply usher in greater sell off vans of money. This has been happening for a protracted time. Now that crack that replaced into purely some inches is now 30’ huge and demands hundreds of sell off vans to objective to fill the hollow. This strategies-set to our project is the dumbest ingredient. i think we are interior the begining of sorrow and woes which will spiral out of control international. The robin hod goverment will proceed to take from the undesirable to grant to the wealthy. this means we are able to pay for all people who over prolonged mortagaes and may be able to not pay down debt. you're watching the autumn of the yank Empire!!

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