The Dow Jones group of indices were thought up in the late nineteenth century, a time when bloodletting was still a go-to medical treatment and when people got around on horses. Coal was starting to replace wood as a heating fuel and blocks of ice delivered to your door kept food fresh.
Their two main virtue back then: they’re easy to calculate by hand and they were better than nothing. Today, only the Dow Jones Industrial Average, consisting of 30 large-cap stocks and calculated in the same outmoded way, remains in common use. Nowadays, as I’ve written before, the Dow’s chief value is that it’s a sure-fire alarm bell that the user–mostly media commentators–doesn’t have the faintest clue about the stock market.
A similar, more general, cluelessness “tell” is talking about gold as if it were still money outside of places like China or India, where people don’t trust the banking system and where the ability to bury your wealth in the back yard is a key attribute. I’ve written on and off about gold over the years. You can search for more detail, but this post has a reasonable summary of my thoughts.
I bring this up today mostly because Trump’s latest brainstorm is to revive Judy Shelton’s nomination to the board of the Federal Reserve. Contrary to its prior unwillingness to approve her candidacy, the Senate now appears ready to vote in her favor. This, despite her lack of economic training or experience and the hodge-podge of mutually contradictory views she holds–including her crackpot advocacy of a return to the gold standard abandoned a half-century ago.