Anything priced in dollars goes up in price as the value of the dollar declines. A better measure of the performance of the S&P is to look at it priced in gold (i.e. how many ounces of gold would it take to buy the S&P) This is a more accurate representation since the price of gold has remained fairly stable for roughly 3000 years. As of July 2009, it takes about .96 ounces to buy the S&P. The long term average (1980 to today) is 1.74 ounces of gold to buy the S&P and the true high for the S&P (measured in gold) was in 1999 when it took 5.5 ounces to buy the S&P.
NOTE: THESE PRICES AND CHART GO TIL JULY 2009...YOU KNOW WHAT GOLD HAS DONE SINCE THEN...THE S&P IS EVEN CHEAPER NOW COMPARED TO THE CURRENT PRICE.
NOTE: BUT THESE ARE LAGGING INDICATORS AS THEY REPRESENT THE ECONOMY WE USED TO LIVE IN. DOW 14K HERE WE COME. (weeeeeeee)