Why Dow 11,000 Matters So Much

A close above Dow 11,000 matters about as much a close above 10,000. In my commentary Dow 10,000 is meanings, which could easily be rewritten as Dow 11,000 is meaningless, I suggested that

As the dollar continues to devalue, Dow 10,000 today will no longer be comparable.

Nominal or U.S. dollar denominated price levels are meaningless during periods of aggressive currency debasement. Dow 11,000, or any round number, only matters to those that equate rising stocks prices with improving economic conditions. The Weimar Republic experience of the 20's and an economic fallout of the 30's illustrate how rising stock prices can coexist with an economic collapse.

Weimar Hyperinflation Experience:


Be wary of spoonfeed analysis.

Don't discount Dow 11,000's role as a much-needed confidence builder in this still-shaky economic environment. With home prices down, salaries stagnant and little to no hiring taking place, consumers need every bit of positivity they can get.

"This is the hidden wealth effect and it does matter," Cramer said during Friday's Stop Trading!.

Source: finance.yahoo.com