Why the recent stock market high wasn't that high to begin with

The pollyannas rejoiced recently when the Dow Jones Industrial Average at last broke 14000 on July 19th 2007. "See!" they thought to themselves, "The economy is doing great! Who are these fools who constantly warn about doom and gloom?". These are also the same permabulls who tend to believe every statistic the government publishes. Here I will show that this new "high" was never high to begin with, and any profits made by tracking the DJI are more akin to a statement issued by the Red Queen from Alice in Wonderland fame:

"Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"

Here I will compare the two previous peaks, the aforementioned from this month (14000), and the peak of the internet bubble: on Jan 14th 2000, the Dow Jones reached 11,723. The reasons why I compare peaks, and don't measure from trough to peak are because of hindsight bias and because I want to compare apples to apples (peak to peak, trough to trough).

I'm not going to use inflation to measure the change in the stock market in real terms, as it would involved a longer discussion about what the "true" inflation is. Instead I will compare the purchasing power of the dollar compared to other currencies. The currencies I have chosen roughly correspond to the G8. I chose gold and silver as traditional currencies and stores of value.

Data from Onanda.com	2000/1/14	2007/7/19	purchasing power drop
British Pound	0.60750	0.48770	19.7%
Canadian Dollar	1.45080	1.04360	28.1%
Euro	0.97530	0.72470	25.7%
Gold	0.0035210	0.0014870	57.8%
Japanese Yen	106.150	121.9560	-14.9%
Russian Ruble	28.670	25.44230	11.3%
Silver	0.19610	0.075990	61.2%

The change in the purchasing power of the dollar compared to other currencies is absolutely astounding. The only currency that the dollar has actually increased its purchasing power against is the Yen, but this is mostly due to the fact that the Japanese have been pusruing a Zero Interest Rate Policy for many years now. For those not familiar with it, basically the Japanese have been "running the printing presses" like crazy to stop deflation, but it hasn't been working quite the way they expected (see Carry Trade).

Get ready for the big surprise: the peak-to-peak increase in the stock market was only 19.4%! As an intellectual exercise, if you had bought Euros or Pounds and put them in a regular savings account, and not invested in anything you would have made more money. If, like presidential candidate Ron Paul, you had put all your money into Gold and gold mining stocks, you would be making out like a bandit.

This is why I'm voting for Ron Paul for this presidential election. The Federal Reserve has been devaluing the currency so much, it's no wonder that the stock market seems to be shooting through the roof! Ron Paul will tame the federal reserve at the very least, and eliminate it entirely if he can.

International support for Ron Paul

It seems as if the message of liberty, peace, and prosperity is loved not only in the United States, but throughout the world. People in other countries have spontaneously picked up the message of Ron Paul. Witnesseth:

• Ron Paul France (France, in French)

• Bavaria for Ron Paul (Germany, in German)
  This group celebrated the Fourth of July, when the local branch of the American Embassy would not.

• Belgians for Ron Paul (Belgium, in Flemish)
• Ron Paul Brazil (Brazil, in Portuguese)

And then there is, of course, The Austrian School of Economics (English) who is behind Ron Paul.

Ron Paul Cures Video Game Addiction

Put down that controller, boys and girls, Ron Paul may just cure you of video game and television addiction! Witness this young man attest to this fact:

Ron Paul noticed this effect early on:

"Remember the complaints that kids were addicted to TV and video games, and ignored the world around them? There are plenty who don't fit that bill. And the tool in their hands and ours is the internet. With it, we can circumvent the biased media."

Why I will no longer work on Mursatron 5000

As some of you have seen in a previous post, I had already started creating artwork for the game Mursatron 5000: A Casey Serin Simulator. But whenever I sat down a done research on using a third party game engine or created my own, I got the sensation that I was doing work not having fun. "Nonsense!" I'd tell myself, "This will be awesome! This is for Casey Serin fans and haters everywhere!". Then I thought about it some more. All I was doing was fan service. Casey Serin is going to shut down his blog in August anyway, and after the hatred simmers, he will eventually fall into obscurity. That is, until the day the IRS, FBI, CashCall, and LossMitPro catch up to him and wring him dry. My three book covers I think are enough entertainment.

I have come to the conclusion that I have more useful things to do than to slave away on a video game for several weeks that is likely to turn out pretty mediocre, or worse yet, would be as incomplete as any task that Casey Serin puts his mind to. But, more importantly, I have discovered a more important purpose to my free time: supporting the Ron Paul political campaign. I had actually been following him for a while, as I discovered him to be the lone, sane, honest politician in Congress. He isn't tied down by lobbyists. He holds the "quaint" notion that the Constitution limits the power of government and should maximize the freedoms of individuals as well as the states to make their own decisions. He's for sound money, as opposed to having our money controlled by unaccountable private institutions (the Constitution says only our government can control money... and there was never an amendment to change that). He wants to stop our country from engaging in nation building, as we don't have the moral authority to bully countries into doing our bidding. Why the hell are our troops still in Germany after the Berlin Wall fell? Nation building should only be the result of beating another country in a just war, not en end to itself. Also, continuous warfare on non-entities (War on Terror, War on Drugs) drains the economy and erodes our civil liberties. I digress; my point is that my skills are better served than making a silly game about some naive, amateur, fraudster.

Europa Barbarorum for Barbarian Invasion

EB for BI is no longer hosted here. It has been released to the public domain and is now on sourceforge.

Note: Europa Barbarorum is an amazing mod for an amazing game called Rome Total War. To those not familiar with Europa Barbarorum, Rome: Total War is an amazing ancient era civilization and combat game, which allows you to manage ancient armies much like an ancient general would. EB takes it to the next level by making the game as historically accurate as possible.

From Zero To Hero: Ron Paul Is Now a Top-Tier Candidate

Just a few months ago, Ron Paul barely recognized in polling statistics. Before the election race started however, he was a favorite among libertarians and admired on a few economics blogs. Due to more people hearing his message on the internet, ABC news reports that Ron Paul has topped McCain in campaign financing with 2.4 million dollars. This is heartening, because this financing consists almost entirely of personal donations instead of the usual special interest or corporate donations. This also omits "in kind" financing due to the fact that donations of time and money aren't calculated until later. In terms of financing, the makes Ron Paul a top-tier candidate. This is a sign that his campaign has momentum, and his poll numbers should undoubtedly go up. He is already the top republican candidate on youtube and a top search in Technorati, but due to this surge in financing, the mainstream media will find him hard to ignore.