Long Position on Silver and Gold?

[roberth]

Forgive me if I am not getting this right. I am kinda just getting to learn about this stuff.

But, isn't stock indexes act like a fake indicator? In much the same way as the value of the USD goes down, stocks become more expensive. So in the long run "The DJIA hit 17K, etc." would be bad news right? It takes more USD to buy a share of stock.

No sweat, I'm learning new things every day and I've only been watching for a couple of years. There are other people on this board who know WAY more than I do, I just post alot in here because I'm interested in all the things that drive the topic. A good place to start is Investopedia - http://www.investopedia.com/ Glad you've taken an interest in this topic and hopefully economics as well.

I cannot speak to your question about the indices being fake or not, I just don't know enough to make that call. I can only say that the stock price used to be a very good indicator of the financial health of a company, I'm not so sure about that anymore due to FedRes/FedGov intervention and regulation.

Your are correct that due to QE the one dollar bill you hold in your hand right now has less value than it did 7 years ago, so yes, the dollar itself, having less value would be contributing factor to why stocks keep going up because it takes more lower value dollars to buy the same share of stock than it did in 2007 assuming of course that the company stock you're talking about is a company that is producing new and wonderful things we want and need.

I recently ranted about finance companies being part of the Dow Jones 30 Industrials index, finance companies don't belong there because they don't produce anything, they are services not manufacturers. I'm just old-fashioned that way.