Inflated record: what is behind the growth of Dow Jones to 20 thousand points

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2017-01-27 15:00:21

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Inflated record: what is behind the growth of Dow Jones to 20 thousand points

January 25, the U.S. stock market the Dow Jones 30 (DJI) for the first time in history crossed the mark of 20,000 points. The President of the United States Donald Trump reacted to this news in his Twitter one word: "Great!", in this case, can be translated as "Grand!".

But what is behind this record? What processes in the American and global economy it represents? And what to prepare for in the near future?

What is DJI and what it eats?

the Dow Jones is a weighted average price of shares of several (in this case 30) is the largest U.S. companies, thereby reflecting the dynamics of the stock market.

Because the method of its calculation is quite simple, the "value" of one point DJI is not a constant, but a variable that is in the range of approximately 15-65 cents.

Due to fundamental changes in the U.S. economy, despite record growth, the share of affiliates DJI for the period 2009-2016, has declined from about 19% to 15%, while the total volume of US stock market increased to 24.7 trillion. (35% of world stock market against 45% in 2008). The increase in the cost of the stock DJI continues since January 2009, more than eight years and is one of the most prolonged periods of growth in history.

Although, as I said, growth.

Dollar nonecha is not what it was this morning. The real purchasing power of debentures of the fed, which mistakenly referred to as US dollars, over the last eight years has declined by about 2.3 times. First of all, because of the policy of "quantitative easing", and in fact — almost uncontrolled emission of dollars in cash in the period 2009-2016 years (just both of the presidential term Barack Obama).

According to various sources, the fed "flooded" the world markets not less than 16 trillion bucks, over $ 9 trillion — in the form of "cache", that is, paper dollars. While 9.4 trillion of them went directly or indirectly to Finance the Federal debt of the United States, including 6.2 trillion trade deficit.

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So formally record growth DJI is fully covered by the issue of dollars and is confirmed neither economic growth nor the increase in current income recorded in it corporations.

moreover, the indicator "capitalization/profit" even here in the "conservative" sector of the stock market, continues to grow steadily and has already reached the level of 17.8 (for the Dow and S&P 500 is 19.4, "hi-tech"NASDAQ — more than 30).

DJI and DJT, or how "hedgehogs nightmare"

according to the theory of large systems, reaffirm the historical experience, this kind of "boom" in the stock market can't be eternal and even a long.

Bullish trend sooner or later gives way to bearish, and the higher you climb on the speculators, the harder they fall.

Why, in that case, happy 45th President of the USA Donald John Trump (DJT)? And he enjoys the fact that continuing after his inauguration, the growth of the DJI shows: main partners and allies of the USA took declared and impersonated them strategy seriously.

This means that "hot capital" from all the world's financial markets (especially Europe, China and Japan) is ready to run in the US, even without further fed rate hike and strengthening of the dollar. In the language of the dashing 90's, "screwball" Trump immediately "zakoshmarili hedgehogs" to a state of almost complete readiness. That would prove it.

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So a visit to USA, Prime Minister Theresa may and is scheduled for November 27-29 closed-door talks with the White House can be seen as an expression of the readiness of London (by the way, is still the largest financial center of the global economy) to participate in this process and to get their rightful Commission. The division of drug trafficking in Afghan opiates, the hydrocarbon energy resources of the Middle East and other "Goodies" is still nothing more than a garnish to the above "main dish".

the fact that Washington and London will again agree among themselves — this time with the "Trump factor" — no doubt.

Like the fact that the Euro, the yuan and the yen, figuratively speaking, you need to prepare "on an exit with things". While just about of the yuan there is some doubt.

But the ruble and Russia already passed fire and water, apparently, will be the last and most difficult test of copper pipes. When everything seems to be good and many succeed. In these conditions, there may be the infamous "dizzy with success", which is very easy to lose not only the successes but also the head.

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