Most investors look at a rising market and assume progress. But on a Fed Day, that assumption can be expensive. Price moves for three very different reasons: real business improvement, currency dilution, and story momentum. If you don’t separate them, you end up celebrating gains that are really just your money getting weaker. Today’s column tackles a simple but uncomfortable question: are stocks rising because American companies are genuinely producing more and better—or because the dollar buys less of everything that matters?
Using a civilian-grade calculation—no PhD, no quants, no CPI fairy dust—we strip market gains into hard-constraint terms the Fed can’t print and China can’t fake overnight. When you do that, something sobering shows up. Since pre-COVID, the market’s headline gains look impressive. In real purchasing-power terms, they’re far less heroic. Some genuine productivity exists. But a large share of what feels like “growth” turns out to be forced defense against monetary dilution.
The punchline matters for today’s rate decision, today’s ChartPack, and the next several years of investing. Roughly half of what many investors think is wealth creation may simply be money illusion—priced in as if it were permanent. That doesn’t make the market wrong. It makes situational awareness essential. If you want to know whether you’re getting richer—or just running harder to stay in place—this morning’s Peoplenomics lays out a framework worth stealing.
So is our view about the future on knowledge as Elaine and I face one of the hardest decisions seniors make: What to do with all our beloved books?
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