It seems from what I read that the activity you see as signs of a recovering economy is for the most part built on the Fed’s Quantitative Easing, Stimulus or whatever they are currently calling the funny money being created out of thin air by Bernanke.
Just the mention that the Fed might someday slow down its creation of fiat currency caused a huge panic in the stock market recently.
Of course home prices are up. All of the really low end bargains have been snatched up. If home prices are up 12% that is only after they dropped 50% to 60% or more.
In my area, one of the hardest hit, most of the homes being bought are still from the foreclosure backlog. Most are being bought by large investors and converted to rentals or just being held as investments. This information is from a recent newspaper article analyzing the local housing market.
The sad truth is that the economy is still being proped up by the infusion of money from the Fed and would collapse overnight if the Fed just stopped.
And one way or another, it will have to stop someday.
“it will have to stop someday.”
Debt to GDP is now 105 percent. Highest it’s been since 1945.
Obama has jumped it from 65 to 105 in just 4 years. Projecting the end of the Obama years would put the US at 145 percent debt, the highest level ever.
So the ride will stop - but it doesn’t have to stop during Obama’s term. Default won’t likely happen in the next 3 years, but may by 2020.
On what planet does Fed Money have the first thing to do with oilfield fracking?!