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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: kris b who wrote (76438)12/22/2006 1:17:40 PM
From: jimmg  Read Replies (3) of 110194
 
<<<Stop printing and have them fend for themselves. Then we gone see how smart they really are. So far the game is rigged in the Pig Men's favour.

Most bears seem to think that when the market goes up, it's because the Fed is printing money. This is not true. There are millions of people gambling in the stock market. For the most part, the market has gone higher because the majority of people want to take on more risk and so far this risk has been rewarded because most companies are growing their revenues and earnings fairly rapidly. There is no conspiracy to reward favored "Pig Men" at the expense of the honest, noble bear community.

The total size of the Fed's balance sheet amounts to about $2,600 per person in the US. This has been built up since the inception of the Fed. There is no willy nilly printing going on at the Fed.

For the most part, the stock market reflects the economy. Americans are spending like there's no tomorrow. Spending on Nike's, used cars at Carmax, huge people waddling in at Costco with 2 and 3 carts stacked full of massive quantities of food, electronics. Americans are borrowing and spending in massive quantities. This is what is driving the stock market. When this stops, the stock market will drop.
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