IdahoCopper wrote:This market bubble is solely fueled by the fed's QE programs. That money has to go somewhere, so it goes into equities. Asset prices increased due to all the counterfeit money injected into the system. When/If the spigot is finally turned off, that "money" "invested" in equities will evaporate as the bubble pops. Hard to say what course the money-printers will take after this one. But most likely, more of the same.
Yes, but perhaps that's an incomplete thought. The QE "money" also goes into bank balances to prop up overvalued assets (e.g., the large numbers of essentially abandoned properties that are still being carried at full value), and for currency exchanges to prop up other systems like the Euro. Continue the thinking.
The total quantity of global assets is about the same as it was 7 years ago. Yet the total amount of "money" is, what... twice what it was (or more?). If the system was fully transparent that should create gross inflation, and the central banks have declared that they are actually trying to create inflation and yet the velocity of money is declining and the inflation that we do see is sporadic and limited. What does that mean?
The price of energy is falling, which means that demand is down - globally. What does that mean?
The ability of the US economy to recover with speed is (arguably) at an all time low, due to massive government regulation that has become near-fascism, where the government is controlling industry indirectly. Ability of small business to contribute to recovery / expansion is more significantly impeded by out-of-control regulation than ever. What does this mean?
Government assistance (funded by borrowing) is at an all-time high, dwarfing even that of the Great Depression. We are in the third generation of an entitlement mentality where increasing numbers of people have no idea what it means to work for a living or hold to their word. What does that mean?
It has been proven that there is a mainstream media that is generally not capable of independent thought, which is pushing a pro-government progressive agenda, and which is clearly working on keeping the masses passivated with the belief that things are good and getting better, despite the factual evidence to the contrary. What does that mean?
Despite MSM trumpeting a recovering economy and low unemployment, the number of US workers is at a multi-decade low (arguably an all-time low if you correct for the difference in society, given that few women worked outside the home >50 years ago) and both total savings and net income of citizens is in decline. What does that mean?
Support of the USD as a mechanism of trade based on oil appears to be breaking down, and non-USD trade zones and agreements seem to be popping up. What does that mean?
Despite weakening US financial and industrial status and nearly unlimited money printing with no fiscal discipline (precious little discipline of any type at all) , the US still has (for now) the most powerful and most capable military in the world. That type of strength cannot be ignored, as printing money without a means to back it up truly has no meaning. Printing money with a military like that of the US does change the perceptions of the buyers. So at least In the moment global investors seem to be willing to flock to the USD as a "best of the worst" choice. What does this all mean?
Think about what things might come next, in what order, brought about by what possible means, and to what results.
I'm not pushing a definitive answer, but I am pushing critical thinking.
Posted: Wed Dec 03, 2014 5:32 pm
