Jay, I was brief. As you have seen from the graphs from the 19th century until now, the Dow has traced a century of increases, with some fun on the way. People say "Remember when a cup of coffee cost a nickel?" as they shake their head at the current prices.
For 3/4 of that century there was a gold standard, which was ditched quarter of a century ago and we really got things hopping; especially with oil getting cheaper and billions more people sharing unit costs of creativity around while avoiding the worst excesses of war and mayhem.
So, with the Dow at 100,000 and a cup of coffee at USD100, things will be the same. We'll shake our heads sagely and recount the glories to our bored and impatient grandchildren of the stockmarket crash in 1987 and the irrational exuberance of Y2K and how cheap things were then.
They'll quote us Q10 to mow the lawn before hurrying off to reinvent once again the excitement and intricacies of romance [which seems to remain a constant in the young - more so than gold]. The USD might still be used to price shares for some time to come and for old fogies who can't keep up with the changing times. It's a bit like the Poms are continuing with the pound, which represents their days of glory [now two centuries ago], rather than join the Euro.
They barely coped with decimalisation of the pound and for years later, they'd want to pay half a crown for something instead of 25 pence. They wanted bananas sold by the pound and paid for in pounds shillings and pence. Metrication was beyond them but I think they have now heard of kilograms and litres.
Q10 will represent USD1000, so people will be similarly rich as today [compared with each other - the poor will still think the rich have it made], but the USD figures will just have another zero on the end due to continuous printing of more of it. The Q will probably be split to retain a numerical parity with the USD as is done now. People then will be vastly richer than now in what they can actually buy. The same as we are incredibly wealthy compared with people only 30 years ago. Calculators, computers, cars, air travel, international phone calls and other stuff all took a very large number of hours to earn back then, but today calculators are near-zero and international phone calls are more limited by the desire to talk than the budget. Compared with 100 years ago there is no comparison, even for the most wealthy.
If the Dow goes to 5000, there won't be a lot of people feeling well-off. That would involve global financial fear, serious serotonin reuptake, dopamine deficiency and melatonin inadequacy. Aggression and violence will be endemic, [see discussion of neurotransmitters, Prozac and other serotonin reuptake inhibitors, and free will]. Gold will certainly have been a great speculative purchase if that happens.
Pass the Prozac,
Mqurice |
