Wagner- said: Actually Wilshere 5000 did not increase 14x from 1985-2002 (the period I referred to). It increased only 7x. Just like you need to match nominal with nominal you also need to match periods when comparing wages and assets. The nominal wages have actually increased more than 2x from 1985-2018 when Wilshere increased those 14x that you used as a reference.
Can I suggest that accessibility to stock market has made people to switch to asset that are earning income instead of assets like gold? And perhaps it can explain to some extent this trend of higher stock valuations?
Of course, agreeably, stock prices are high right now according to CAPE ratio , but the OccupyWisdom chart would make one incorrectly think that Wilshere 5000 would have to nominally fall 6x to "get back to normal" with the incorrectly used lagging real wages. How about falling only 2 times to "get back to normal" with lagging nominal wages?
Isn't there a huge difference between 6x vs 2x?