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Dollar Versus the S&P 500

For those of you watching stocks go to the moon, please pay attention to the value of the US dollar, the currency with which we buy all goods.  The DXY tracks the international value of the dollar versus 6 world currencies.  When the dollar plummets in value, the value of everything in dollar terms rises.  So when the dollar goes down, the price of the S&P 500 goes up…this has nothing to do with equity growth forecasts and everything to do with inflationary fears.   If the US dollar goes the way of the Zimbabwean dollar the S&P 500 will go to a billion!  Hooray!

S&P Up/Dollar Down

S&P Up/Dollar Down

Thank you Helicopter Ben.

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Posted in Economics, Markets, Politics.

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Continuing the Discussion

  1. Dollar Inverse of S&P 500 – SurlyTrader linked to this post on August 6, 2009

    […] “The Dollar’s Continued Decline: Unintended Consequences” which elaborates on my previous rant.  Wonder if this sort of fact will ever make it to CNBC or a widely distributed news […]



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