Wednesday, August 7, 2013

The Economy Sucks and Here's Proof the Fed Did It, Again.

S&P 500 dips and it seems there are plenty of reasons to get out of the market until the dust settles on this whole new world order shakedown.




From Zerohedge:

There are three cornerstones to our current view that risk far outweighs opportunity.
As 4 ½ years of $1 Trillion of fiscal stimulus and $1 Trillion of monetary stimulus per year wind down, there are likely to be negative repercussions.

Since 2000, the rate of economic growth has been approximately half that of the previous 70 years. As such, we don’t believe that warrants paying above the historic multiple for the market.

Finally, while earnings have recovered and registered new highs, overall the growth is low quality and as such unlikely to be sustainable without the economy picking up.
One can go further and talk about risks like a different Fed next year, Debt Limit and Budget battles, and relatively slow global growth.  But why?
You and I know that shit just costs more.  A lot more in most cases. The KGB-like Federal Reserve says the inflation target is 2%.  Here is what others says:


Indeed, look at this breakdown of inflation and deflation from 1872 to present.  Notice anything?  How can our government, businesses, and individuals plan appropriately, take the appropriate amount of risk on the market, save or spend, invest, or borrow, when the Federal Reserve is manipulating market data?


And if that isn't enough reason, then just try buying the same things you've always purchased with the same income you had 40 years ago.  NOT!  At least we know the US dollar will be good for something after all is said and done.


No comments:

Post a Comment