I wonder if the market rise doesn’t represent the devaluing dollar. Companies have real assets and value. When the dollar is worth less, it takes more of them to buy the same value in the company. That’s my theory.
It is ALL about the US Dollar.
I’ve been saying this for a few months now.
The upward move in the Dollar has been significant and will likely continue.
I posted a chart on another FR thread earlier.
http://www.freerepublic.com/focus/news/3266321/posts?page=16#16
Note that between 1997 and up to 2000 the FED had been raising rates. In 2001 they began cutting rates. They cut rates so low that it contributed to the Housing Bubble which blew up in 2007-8.
So, the economy tanked and there is no more room to cut rates so they begin QE. The QE efforts worked to keep the Dollar from going up since a higher Dollar would hurt our US exports. Now that QE has stopped, our Dollar is going up.
They can’t cut rates because we are pretty much at zero now and if they raise rates then the Dollar will REALLY go up, and that will crush the market and virtually all commodities.
Keep in mind that the recent rally in the Dollar is happening as the result of a few things, weakness in the Eurozone, the end of QE and the “hinting” of a rate increase.
If the FED actually raises rates?
The money will flow into the US Dollar so fast your head will spin.