Stock Market

The stock market has recovered 100% since the financial crisis.  But anyone who is out there amongst the living knows the economy and jobs are still weak.  What is going on?

Thomas Sowell talks about whether what can happen in Cyprus can happen here.  He explains how the Fed is more clever and powerful than Cyprus.  Rather that seizing people's savings accounts, the Fed merely prints more money, diminishing the value of existing money, ie inflation.  So while people's money sits in savings accounts getting zero interest, the amount of stuff people can buy shrinks.

Inflation is what is going on with the stock market.  Inflation is what drives the Fed's policy QED policies.

What does this do?  Transfers money from savers to borrows.  Encourages taking on more debt and more spending.  Obama admin thinks this will kickstart the economy.  Sure it will.  Put money into the hands of spenders who don't earn it from savers who would tuck it away and consumer spending will go up.  It just can't keep going up, however, because at a certain point, someone has to make the stuff and be productive and innovate products.  And when you punish the folks who would do that - well - pretty soon, you'll even run out of other people's money to spend.