Woo hoo! I’m putting everything I have in the market today, then. Thanks!
The stock market is now a Federal shell game. Past performance is meaningless as an indicator, since the Fed started pumpint $89 billion a month into it.
Here is what we know:
1. Without constant and likely increasing QE from the Fed, the market would collapse.
2. Constant or increasing QE from the Fed only has one possible outcome, which is hyperinflation and destruction of the economy.
3. Things that cannot go on for ever don’t.
The Federal Reserve Corporation is currently creating money out of thin air at the rate of $1 Trillion per year. Just yesterday we were reassured this money-printing would continue until unemployment returned to normal.
Given that the federal government spends about twice what it takes in in the form of taxes, and the Federal Reserve Corporation makes up the difference by air-backed money and new debt, and given that about half of this new spending goes for social spending, and about 25% of the grocery money in the US is spent at Walmart, what percent of the profits of Walmart, and consumer goods firms like P & G come from money-printing?
The prices of shares of listed stocks, is substantially bid up by this ocean of newly-created money. Worse, the time-value of money is substantially distorted by the actions of the Fed. We cannot know what the rational price of the S&P 500 should be. We can prove this these prices are a mirage by observing how the market reacts to any hint that the money-printing will slow down.
It is my estimation that stock prices are 1/3 higher than they would be absent the massive spending and debt creation of government. Liberals (er, “progressives”) love to scold the rest of us about “sustainability”. However government spending way in excess of its income is not sustainable, and sooner or later government will become exhausted at its attempts to sustain the mirage. When rational economic metrics return for the time value of money and for the prices of good and services, the adjustment will not be pretty, or easy.
Bring back US jobs.
Yippee! I’m buying the Dow today! All in!
Anyone making the claim of the title of this thread is going to need to explain then why the treasury has been putting $85 billion each month, or $1 trillion each year, into the markets if the markets are so healthy.
Sorry, but I won't be one of the Joe Sixpacks Wall Street distributes to.