boisterousbob

A Dow Double in 10 years? Easy

Inflation will help the dow doubling case. Stocks are commodities priced in dollars. If the value of a dollar falls (inflation) the price of a stock expressed in dollars will go up more quickly.


On Oct 07 02:13 PM Larry House wrote:

> It may sound easy enough, but don't underestimate the long-term economic
> problems we face. Other "experts" who manage billions of dollars
> are predicting growth of 1-3% for the next few years--a good-sized
> chunk of the 10 years. Beyond that, we may face high inflation.
> On top of all, we have growing budget deficits. Stocks will have
> a hard time averaging 7.2% per year with that backdrop. I hope it
> happens, but I don't expect it.

Is Alcoa a Bellwether for the U.S. Economy?

It is a good note to be cautious of AA's earnings.

I do have one quibble, and not just because of this article I hear these comments repeatedly and don't understand them:

'cash for clunkers' government policy, which will not positively impact auto demand in the long-run.

This is self evident, this program is designed to help us through the recession not the long run. Why even bother to point this out, are you arguing that demand for vehicles will never recover?