The Cost Of Dow 11,000
Stocks are performing fairly well, still very much higher from the bottoms hit in early 2009. This of course has not come without a cost. What is that cost?
Well, here’s a hint. Gold is at $1400. Silver is at $29. Oil is above $80. Food prices are at higher levels than they were previously.
There has definitely been a cost to orchestra this stock market rally which is exactly what the Federal Reserve has done. The cost has been a weakened currency and lower purchasing power. The Fed has bet that by boosting asset prices including stocks, Americans will feel wealthier and go spend money and boost the economy.
Even if this is happening – and it is to an extent – it will not improve the actual economy, but Americans are becoming increasingly broke. A strategy that continues to make Americans increasingly more broke is not a strategy that results in any foundational recovery or increase in future prosperity. Quite the opposite.
So if that is true, then why do it? Well, it seems that the current leadership has a vested interest in keeping the status quo going as long as possible. Maybe to hang on to power or to their current place in society? I don’t know why exactly. All I know is that the leaders want the game to continue no matter who is hurt in the process.
There is only one thing you need to know: The average American is getting decimated by this so-called recovery.
The only way to salvage some of your wealth or assets might be to vacate the system that the Fed is so set on propping up. It might mean pulling money out of the traditional investments and assets and out of the manipulated financial system. Or, it might just mean you stop further allocation of additional funds into these areas, and instead put your hard earned money into hard assets that can’t be debased by politicians.