One of today’s most common economic fallacies is that the soaring stock market is evidence of economic recovery. Nothing could be further from the truth.
Stocks have almost tripled since the 2008 collapse, but that stock growth stems from Federal Reserve money printing (inflation) and near zero interest rates. The Fed’s balance sheet has grown more than fourfold since 2008 — to $4.3 trillion — and was used to prop up the “too big to fails.” That money had to go somewhere.
It has found its way into the stock market because U.S. Treasuries are paying less than the rate of inflation, and corporate bonds, certificates of deposit and other fixed-income products pay even less. This and price inflation (currency devaluation) is fueling the rise, not positive economic growth or common sense.
Stocks are being bought by the banksters and large corporations. Average people aren’t buying them. A study by the Pew Research Center found fewer than half of all Americans (45 percent) own stocks. The number is down from 65 percent in 2002. Individual investors are cashing in their retirement funds just to survive.
More
DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
Exactly but try explaining that to those who vote democrat.I understand most are govt and union workers but most citizens are in the hole.
ReplyDeleteI haven't gotten enough saved for stocks yet but I have bought a few cd's. And it sucks. When Bush was in office I bought two cd's for 5 years with 5.99%. Today if I buy one I'm lucky to get 1.99%
ReplyDeleteSo the working guy is the one who is losing.