Economic growth is pitiful. Unemployment has topped 8 percent for an exhausting 43 months. The nation is careering toward a so-called fiscal cliff, and maybe a recession.
So why is the Dow Jones industrial average, that trusty gauge of corporate America's strength, just 4 percent shy of an all-time record? And why are the smaller public companies measured by the Russell 2000 index almost there already?
Start with two words: Ben Bernanke.
3 comments:
Simple answer. Stocks are representing equity in a company. Stocks are sold on a dollar per share basis. Because the FED is starting Quanitative Easing again (QE3) the value of the dollar is reduced causing more dollars to purchase the same amount of equity in the company.
The dollar you had from 1 month ago is not worth a dollar any more.
Big investors are pulling out quicker than they were buying these days. I just shake my head when the Obamanistas say "the stock market is up under Obama." I don't bother explaining anything to them, knowing full well it goes in one ear and out the other and it is way too above their heads to understand.
A victim of QE is (not maybe or possibily but IS) going to be the pension funds. This stimulus (QE)which is a short term fix, will leave those funds in long term pain.
Anyone expecting a pension including government workers do not count on getting what you expect. You've heard it right here. So far I have been 100% correct on all my predictions on this government's policies.
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