We are, at this moment, in the middle
of what many people say is the longest bull
market in the history of the US stock market.
I would like to argue that they are wrong.
Now, to start off with, let's take a look at this scale
here, which is the S&P 500 main index for the US stock
market in dollar terms.
That's how you normally see the S&P 500 presented.
And you can see the argument why this is a big bull market.
We have been going up roughly ever
since this point here, which is the famous level of 666.
Back in March 2009, the S&P hit rock bottom
at the devil's number and has been going up
roughly ever since in dollar terms.
But now, to cast a little bit more light on this,
let's take a look at this scale here.
This is the green line.
And this shows you the S&P 500 divided by the gold price.
You could say that this is the effective price of the S&P
when denominated in gold.
Now, we're going all the way back to 1971
on this chart, which is when President Nixon, who's
in many people's minds these days,
took the US off the Bretton Woods peg to gold.
And you can see that if you look at this
in terms of the gold ratio, whenever
gold is rising more than the stock market,
this line will go down.
And you can see that throughout the 70s,
you have a huge, savage bear market.
That is because rises in the gold price
show you worries about inflation.
They show you worries about debasement of the currency.
There were a lot of those during the troubled decade
of the 1970s.
Now, come 1980, gold gets into a very extreme bull market
and then begins to decline.
The following year, stocks enter a bull market of their own.
And you have this enormous - when you follow the green line
- bull market that doesn't end until here,
in the 2000s, when you get to the dotcom bubble bursting.
That is plainly a much longer bull market of almost 2 decades
than the one we're in now.
Now, this is true even if you can barely
see it on this chart.
But back there, down there, is Black Monday,
when stocks fell by more than 20% in one day.
Even if you count that as a bear market in its own right,
you're still talking about a bull market of some 13 years
at that point.
Now, there's one other point that I
think the gold price can show us when we compare it to the S&P.
You'll see that from the great low of 2009,
it actually fell almost 20%.
And so they'd hit a low, which you can also
see there in the fall of 2011.
That was associated with the furore over the debt ceiling
and also by Standard & Poor's decision to downgrade US
Treasury debt.
Since then, whichever way you look at it,
whether in dollars or denominating in gold,
yes, there has been a very strong consistent bull market.
And it's in that period that the US stock market has comfortably
beaten commodities of almost any description and virtually
any other stock market in the world.
Yes, this is certainly a bull market,
but it's not the longest one in history.