Pumping money into the stock market is not a “stimulus.” It is more like pumping air into a balloon. No matter how much air you pump in, and how big the balloon appears, it still contains exactly as much rubber as it did before the air was pumped in.
I have been waiting for the balloon to burst since late spring so I can come back in and pick up the pieces that I like.
To add one to the list of quotes above, Warren Buffet - When people are greedy be fearful, when people are fearful be greedy.
That's an excellent analogy. I also wonder if "the stimulus" isn't just the opposite. What would be a stimulus is interest on savings. Think of all of the retirees and near-retirees who are cutting back spending to try to conserve principle. That interest is money that goes almost directly into the economy, and a lot of it locally.
Has anyone noticed that the economy tanked and poverty increased when savings rates went on this decline to near-zero? Can't all be coincidence.
Pumping money into the stock market serves to keep that money from raising consumer and commodity prices as fast as would be normally indicated by such vast increase in the money supply. Of course that bubble, too, will pop. Then we get the effects of the ongoing hyperinflation in our immediate situations. Something likeamine in areas not close to food producing land is a likelihood. Chaos is a given. Caeserism is a given.
Pumping money into the stock market serves to keep that money from raising consumer and commodity prices as fast as would be normally indicated by such vast increase in the money supply. Of course that bubble, too, will pop. Then we get the effects of the ongoing hyperinflation in our immediate situations. Something like famine in areas not close to food producing land is a likelihood. Chaos is a given. Caeserism is a given.
The Fed is now like a hamster on a wheel. Everytime they slow the printing the stock market starts to dive. They are caught in their own trap. They have no choice but to keep on printing until finally the train runs off the tracks.