<How can the Dow get to 20,000 when stocks like MRK, GM, AIG, and PFE are being taken out and shot? >
That's easy SS. As I've explained many times over the past 5 years, [not to you particularly], the US$ is subject to financial relativity, meaning as it approaches the speed of light, there's a dilatation effect and the measuring stick used to determine financial reality as viewed from Earth changes. It shrinks.
In layman's Newtonian terms, the measuring stick shrinks with more pixelation of money [they don't really print it these days], so a financial foot now is actually only 6 inches long compared with a decade or so ago, although the measuring stick still says 1 foot [note my use of archaic measurements so American's can understand - and note I even use American-style apostrophe's, being culturally sensitive].
Make a buck smaller and it takes more of them to buy a cow or a Dow [or a COW = Coalition Of the willing]. So to buy a share of GM or QCOM, today takes about $40 a share. But if the $ is shrunk through pixelation processes to half the length, it'll take $80 a share to do the same buying. That will mean a doubled Dow.
See?
Hence, Dow 20,000 by 2010 as they seem to like to pixelate at that rate. Plus, they are nice round numbers with lots of zeroes.
Mqurice |
