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To: jsanders2001
Exactly. The stock market is not an economic indicator. It never has been. It is simply a market whose price is set by supply and demand.

The main reason we had such a boom in stock prices in the late 90s is because of the advent of stock trades via the internet. This caused a huge shift in the demand curve. People in this country who had never even met a stock broker could now go online and purchase stock. People overseas sitting on dollars could now get on the internet and purchase US stocks.

Today, we are experiencing a massive increase in the money supply via the current Fed policy known as "the-printing-of-the-money". It results in more dollars chasing fewer goods, with stocks being one of those goods. Just as bread prices, meat prices, gas prices, and rents have gone up, so have the price of stocks. I don't see people getting all excited when gasoline hits $4/gal, yet when stocks hit some high price, everyone wants to translate that into how well the economy is doing.

17 posted on 04/27/2013 7:23:02 AM PDT by Hoodat (I stand with Rand.)
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To: Hoodat
The main reason we had such a boom in stock prices in the late 90s is because of the advent of stock trades via the internet.

Don't ignore Greenspan's money-printing as a cause of the dot-com boom.

31 posted on 04/27/2013 8:41:02 AM PDT by BfloGuy (Don't try to explain yourself to liberals; you're not the jackass-whisperer.)
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