If you are a frequent visitor to motorcitytimes.com you know I really like graphs. When graphs are done correctly they convey a lot of information in a clear and concise manner.

Therefore, I’m always on the lookout for a good graph to share.

I found this graph, posted at Global Macro Monitor, comparing president’s first two years in office against the S&P 500. This is a very misleading graph:

The commentary accompanying the graph says it all:

If this is Socialism, call me Comrade

No politics or partisanship here, “just the facts ma’am”. The stock market as measured by the S&P500 is up just about 50 percent since President Obama’s inauguration to today’s close. Only Eisenhowser comes close, but not even in the same zip code. A 50 percent stock move does a lot “spreading the wealth around” and Joe the Plumber’s pension is in much better shape today than it was in November 2008!

Sure, sure, there are a ton of reasons to explain the differences, but this is politics folks! A CapEX spending led economic acceleration and pick-up in hiring in 2011, which usually follows such a strong equity performance, will make the President look unbeatable same time next year, in our opinion. Stay tuned.

“Sure, sure, there are a ton of reasons to explain the differences.”

This is a major understatement.

To begin with a CapEX, or capital expenditure, requires, you know, actual capital to be involved in the expenditure. Not creating the capital out of thin air. Because, as we all know, printing money creates inflation.

Inflation, and not economic growth, is what Obama and his ‘stimulus’ spending is creating.

One way to illustrate this inflation is by comparing the S&P 500 to commodity prices (actual raw goods) as a measure of economic growth. Obviously, commodity prices are not an absolute reading of inflation, since their day to day prices are subject to supply and demand. However, looking over a 12 year window, there are some interesting trends happening.

One of the most popular commodities to look at is gold prices:

The increase in gold prices has exceeded the increase in the S&P 500. Based on gold prices, Obama has lost ground on the S&P 500.

Another commodity is crude oil. During all of 2009 and ’10 oil prices have tracked the S&P 500 nearly 1:1. Based on crude oil prices, Obama has had no gain on the S&P 500.

Long term price trends in other commodities such as wheat, silver, copper as compared to the S&P 500 all illustrate, at best, anemic economic growth.

A common measure of inflation is the consumer price index (CPI).

The CPI AKA inflation has steadily increased since 2009 as well. Another indication that the recent rise in the S&P is less than impressive. If you look at MIT’s Billion Prices Project, their calculations show more inflation occurring than the CPI.

When our Global Macro Monitor cheerfully exclaims “A 50 percent stock move does a lot “spreading the wealth around” and Joe the Plumber’s pension is in much better shape today than it was in November 2008!” Remember, the value of your portfolio, in dollars, has increased.

However, those dollars will purchase a lot less today. And, if this continues, even less in the future.