Posted on 03/13/2016 9:32:47 AM PDT by Lorianne
The bull market just celebrated its seventh anniversary. But the gains in recent years – as well as its recent sputter – may be explained by just one thing: monetary policy.
The factors behind that and previous bubbles can be illuminated using simple visual analysis of a chart.
The S&P 500 (^GSPC) doubled in value from November 2008 to October 2014, coinciding with the Federal Reserve Bank’s “quantitative easing” asset purchasing program. After three rounds of “QE,” where the Fed poured billions of dollars into the bond market monthly, the Fed’s balance sheet went from $2.1 trillion to $4.5 trillion.
This isn’t just a spurious correlation, according to economist Brian Barnier, principal at ValueBridge Advisors and founder of FedDashboard.com. What’s more, he says previous bull runs in the market lasting several years can also be explained by single factors each time.
(Excerpt) Read more at finance.yahoo.com ...
Many of us already knew this.
There is a huge bubble that will come crashing down if Bernie or Hillary or Ted are elected.
Sure, sure, if it wasn’t for the Fed, stocks would be trading at five times earnings and paying an 8% dividend.
Fraud ‘recovery’ is a fraud.
The bubble will crash even if the exalted Donald comes into power on clouuuuds of smoke and mirrors.
It will come crashing down regardless of who is elected.
There is a huge bubble that will come crashing down if Bernie or Hillary or Ted are elected.
It seems the market is cracking even now.
Agreed.
Messiah politics is illogical
It will come crashing down regardless of who is elected.
^^^^ This The only reason it hasn’t is the “anointed one” is still in office.
That is a very ignorant statement. Add Donald's name...or ANYONE for that matter. It is a MUST that it crashes...regardless of who is president. Donald's fuzzy math savings will just add to the debt...not help walk us back from it. Short of some MAJOR cuts...that NOBODY will be able to pass the senate with...we are done. I don't care WHO the president is...
I agree with the headline - it screwed me up. I got out before the crash, as it was obvious that mortgages were lethally overextended. Then I waited for the obvious drop, but it never fell as far as I expected - now I know why, PRINTED MONEY. And we are STILL in that cycle.
As someone in the yahoo comment section pointed out, the thing that this various bull market drivers have in common is that they are all debts.
The stock market is benefiting from the “stable” environment created by the Fed. However, the DIRECT beneficiary of the Fed’s actions is the Bond Markets. The Fed is making the market for Treasuries. There would be Hell to pay throughout the financial markets if Treasuries faced a failed auction.
In short, the Fed is monetizing the debt—buying the debt created by massive deficits.
You forgot to include the DONALD. If he is elected we will have a trade war like the one in the late 1920s early 1930s
Since the money supply has increased so much, shouldn’t we be seeing major inflation in the economy?
Or, are we not seeing inflation because the economy is so weak?
If money is being created out of thin air, money which is not backed by any tangible assets, isn’t it predictable that inflation will happen at some point??
This country is screwed no matter what. Donald ain’t gonna save it.
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