Dow Jones Industrial Average is in a massive bear market while stock prices are rising steadily – how is that possible?

You may question, how can Dow Jones Industrial Average is in a massive bear market while stock prices are rising steadily? The explanation is as follows.

The prices are determined by the currency in which you measure it. In constant dollar terms, the real price is manifested. Central bank currency manipulation does not allow that opportunity. So what smart money does is to measure stocks in comparison to gold price. Now plot Dow price divided by the gold price plot for the last ten years. You will see something very interesting. Dow peaked in 2000. Right now, while Dow is making new highs, in terms of gold, it is nowhere close to its top in 2000. As a matter of fact in the last three weeks while Dow made several new highs, it actually fell 5% compared to gold price.
If gold keeps going up which means central banks keep printing money to provide extra liquidity in the massive budget deficit driven environment, stock can go up steadily. But in reality it is in a bear market. It would be much better to hold gold (in lieu of cash) that holding stocks. If for any reason, the Government takes control over the budget deficit and gold starts to go down, stocks will collapse. There is a mood in Washington now to take control over the fiscal discipline starting January 2007.