Why Invest in the "Real Economy"? 09-16-09 mpg Post-Bubble Malaise. No Economic Recovery... Must Read - A quote...."We keep hearing that "The worst is behind us", but the spin doesn't square with the facts. Sure the stock market has done well, but scratch the surface and you'll find that things are not as what they seem. Zero hedge--which is quickly becoming the "go-to" market-update spot on the Internet--recently posted an eye-popping chart which traces the Fed's monetization programs (Quantitative Easing) with the 6-month surge in the S&P 500. The $917 billion increase in securities held outright equals the Fed's $1 trillion increase to its balance sheet. In other words, the liquidity from the Fed is following the exact same trajectory as stocks, a sure sign that the market is being manipulated." - also posted at OnlineJournal -- For more on this sort of issue see....What Ben Bernanke Said - 03-18-08 - mpg It appears that good'ol Ben is doing something else besides guaranteeing...."....each and every person in this country who tries to save their money, be it by buying a CD, putting it into a savings account, a money market fund, or a US treasury...that you will lose your capital through inflation and dollar depreciation. Always.....absolutely guaranteed..." He's also making sure that NO ONE, anywhere, ever, would actually want to invest in the US-NRE's "real economy", sectors such as manufacturing, construction or infrastructure for instance. After all, you'd have to be a complete and total moron to invest in something yielding a paltry rate of return of just five or ten percent a year (assumng a functioning economy) when you could invest in financial instruments like commodities, stocks** or best of all, derivatives, and get seventy, eighty, or in the case of derivatives, a thousand percent per year rate of return -- In other words, you'd have to be an idiot not to put all your money, (or better yet, the taxpayer's money) into what is now known as the Virtual Economy™, especially when it's all being guaranteed by Bernanke & Co. This of course may very well be just a scheme by Bernanke to get his rich Bankster friends out of their positions in derivatives and other markets. It seems they may have been caught a little short (or in their case, a little long) by the "premature" collapse of what was supposed to be a ten year cycle but instead turned out to be an eight year cycle. There is however a very strong possibility he will fail in his efforts to do so, there appears to be increasing evidence that the very same people who nearly destroyed this economy are again currently leveraging the markets at very high ratios (thirty or fifty to one) to recoup some of their losses, whether these losses are currently guaranteed by Bernanke or not, and this is leading to another highly unstable situation in the markets very similar to where they were in 2007. - mpg **(not including "newly issued" shares from firms involved with the "real economy", since such purchases would indeed represent an actual "investment" in that sector of the economy) |