The stock market is on a tear. The S&P 500 has logged gains of more than 50% in the last six months! Is it time to celebrate? Are we out of the woods? Is the stock market once again the road to riches? Is it time to buy stocks? Perhaps not. Contrary to what the USA Today, CNBS, and other mainstream media darlings would like us to believe, this market may not be reflecting the health of the economy. In my opinion, it is more likely reflecting the insane strategy of our government to cure a crisis born of excessive debt and risk taking with guess what? Excessive debt and risk taking.
Here's a link that says it better than I can.
http://www.huffingtonpost.com/robert-reich/why-the-dow-is-hitting-10_b_294682.html
My questions:
-Can our government service its debt without substantial cost to our budget?
-What will happen when interest rates rise to historic norms causing the cost of
our debt to increase to mulitples beyond what it is today?
-What option will the government choose if faced with a choice between defaulting on our
debt, or printing the money to pay it off?
-What will be the value of our dollar if the printing presses continue to run?
-Is the stock market reflecting real economic growth, or the ability of the federal reserve to
prop up asset prices?
-At what point will the fed be unable to support the stock market?
-What will be the cost?
Fubsy
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