The 40,000 Dow will certainly be a moment to mark. The Dow Jones Average has soared nearly 30 percent since President Biden took office in 2021, when it was 31,188. The Democrats are doing their best to chalk this up to the Biden economy as the election campaign swings into the home stretch, with investors full of optimism. If stocks are so all-fired hot, though, why do so many millions of Americans feel uneasy?

Our own theory is that the soaring stock prices are a feature of fiat money. When stocks are priced in the classical measure of monetary value — gold —it turns out that the stock market has dropped. Four years ago, the value of the Dow in gold was 16.67 ounces. As of Friday, the value of the Dow was at 16.57 ounces — a nearly 1 percent decline, and a number far less optimistic than a Dow Jones index that is up 30 percent would suggest.

Valuing the Dow in gold removes the noise of currency debasement, advocates of sound money tell the Sun. Priced in gold, the Dow has been edging downwards since 1999,* a time of relative strength in the dollar in terms of gold. That year the gold value of the Dow reached 44 ounces. That was on August 23, when the Dow closed at 11,299 and the dollar was valued at one 255th of an ounce of gold.

JP Morgan’s chief executive, Jamie Dimon, is among those appearing unfazed by the Dow breaching 40,000. He cautions that the recent market rallies are based on inflated expectations of a soft landing and overly optimistic responses to reports of cooler inflation. “Stocks are very high,” he said on Thursday. But the “chance of inflation staying high or rates going up are higher than people think.” 

While the economy appears to be strong, its sustained success is largely dependent on federal deficit spending, Mr. Dimon notes. “The deficit is 6 percent of GDP, almost $2 trillion,” he says. “That’s driving a lot of this growth, and that will have other consequences, possibly down the road, called inflation, which may not go away like people expect.” 

Since Mr. Biden took office, the value of the dollar in gold has plummeted by 22.5 percent, with the greenback currently valued at less then a 2,400th of an ounce. At the same time, the dollar value of speculative alternatives to the fiat currency — like cryptocurrency — have surged. The Sun has recently described the current collapse of the dollar as a “vote of no-confidence in America’s fiat money.” 

Sound money advocates are taking this moment to push their effort to remonetize gold and silver. According to the director of the Sound Money Defense League, Jp Cortez, In 2024 alone, there have been more than 60 pro-sound money bills introduced in Congress, including Representative Thomas Massie’s bill to abolish the Fed, proposed last week. “Sound money is winning,” Mr. Cortez writes — at least aspirationally — on X. 

With the November election coming up, the Biden Administration will cite the market as an indication of successful fiscal policy. Lincoln’s line about how you can’t fool all of the people all of the time comes to mind. A majority of voters believes that the economy is getting worse, not better. — but let’s make sure we’re looking at the numbers in gold terms, to get the real picture. 

Just to mark the larger point, the Sun is a newspaper, not an investor. Our concern on this head is the monetary system itself and a sense that it has been failing since the collapse of Bretton Woods in 1971. We write in the hope of seeing Congress — to which the Constitution grants all the monetary powers held by our government — launch a bipartisan effort to address the problem of fiat money in the age of the 40,000 Dow.

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* A few years before, President Clinton had famously, if grudgingly, acknowledged that the “era of big government is over.”