You Can't Keep Drinking Forever

Much has been written regarding the economy and the Fed's Quantitative Easing (QE) policy. Many are applauding Fed Chairman Bernanke and touting the stock market as proof of economic growth. Unfortunately as John Adams said, "facts are stubborn things;" and since the laws of economics are as certain as gravity, another perspective might offer some differing conclusions. Record market highs do not reflect wealth creation, productivity gains, or profitability via robust sales, and flat GDP numbers and high unemployment rates provide proof the market is, as always, a reflection of what the future holds. Since the housing collapse in 2008, investors looking for safety turned to gold and other commodities as always in times of economic uncertainty. Today the record high stock market shows that self-interested investors, feeling the financial calamity has stabilized, have moved back into the market, where rising valuations are both a signal and a compensation for significant inflation that...(Read Full Post)