The Dow Which Is Being Spoken Is Not The True Dow

or, How The Financial Press Lies With Numbers

The Dow Jones Industrial Average just hit a “milestone” by passing 14,000. Great, right?

Not so fast (I have assumed that the Euro has remained basically stable. Not a very risky assumption. It has. The St. Louis Federal Reserve uses it as a baseline as well.)

[CHART]

US Dollar expressed as one Euro:

1.3785 (2007-07-16 exchange rate)

1 USD = 1 Euro January 1, 2000

multiplier = .725426

(1.0 divided by 1.3785)

2007 Dow Jones @ 14,000 expressed in Jan 1, 2000 dollars = 10,155.97

Dow Jones record high 11,750.28 (January 14, 2000)

Shortfall in 2000 dollars = 1594.31

Shortfall in 2007 dollars = 2197.76

To get BACK to Jan 14, 2000’s record high, the Dow Jones Average (Industrials)…

… will have to reach 16,197.76

Courage.

Bookmark and Share

About Hart Williams

Mr. Williams grew up in Wyoming, Nebraska, Kansas and New Mexico. He lived in Hollywood, California for many years. He has been published in The Washington Post, The Kansas City Star, The Santa Fe Sun, The Los Angeles Free Press, Oui Magazine, New West, and many, many more. A published novelist and a filmed screenwriter, Mr. Williams eschews the decadence of Hollywood for the simple, wholesome goodness of the plain, honest people of the land. He enjoys Luis Buñuel documentaries immensely.
Bookmark the permalink.

2 Responses to The Dow Which Is Being Spoken Is Not The True Dow

  1. Hart

    Is this like the Tao of the Dow?

  2. Perhaps, but “the Tao of the Dow” title saeems to be owned by someone named “Scrooge McDuck.” The details aren’t entirely clear.