[trebb]

If it doesn't flow into the "economy", where does it go/ Does it even exist? Why is the Stock Market so "inflated" and what does it mean for the dollar's true worth - both now and in the future?

You seem to have a handle on some of the dynamics - can you explain in layman's terminology? Thanks

[Flintlock]

This all makes sense when you realize that the gummint has to LIE ABOUT INFLATION, and LIE ABOUT UNEMPLOYMENT.

[DannyTN]

"If it doesn't flow into the "economy", where does it go/ Does it even exist? "

By "it" I assume you mean what happens when the Fed buys Treasuries which it only started in mass after the 2008 crisis was underway.

It does flow into the economy. You're not seeing inflation because the credit crisis was so severe that money supply shrunk dramatically. We would have had a deflationary depression had the FED not acted. Even so the so-called printing of FED money by buying treasuries has barely offset the shrinking from the credit crisis.

When the economy does recover and credit expands again, there is the potential for inflation. But at that point, the FED is sitting on a bunch of treasuries that it can sell back into the market reducing the money supply.

Why is the Stock Market so "inflated" and what does it mean for the dollar's true worth - both now and in the future?

I don't think the stock market is that inflated. The DJIA was almost 12,000 in 2008 before the crisis hit. Now 5 years later it's 15,000. That's about a 5% annual increase, compared to the historical normal of about 15%.

The PE ratio on the DJIA is currently about 16. Compare that to this historical chart.

But I am very concerned about the continual destruction and offshoring of American industries. Healthcare is now over 25% of our economy. And I don't see an economy where we all provide healthcare to each other and are depending on foreign countries for manufactured goods as a very viable long term economy.