Friday afternoon, I got stuck in a waiting room with a TV tuned to CNBC, the perma-bull network. The market had been closed for half an hour, and the buzz was about how fantastic the numbers are: the market hasn't closed this high since (whenever). Here we have a network of financial commentators and they went for 20 minutes without once comparing the stated numbers corrected for inflation. Finally, one commenter said, "in a QE world, stocks will be going up" - in other words, the larger quantity of dollars created forces prices up. The term for that we use in flyover country isn't "in a QE world", it's inflation. If John Williams at Shadowstats is right and the year over year inflation is running around 11%, when measured how it originally was measured, that 12,862 closing on the DJIA would have been 11,587 - much less worthy of song.
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