Well, look at that.
Just like those of us who actually understand the market predicted.
All that artificial driving up of the stock market numbers we kept warning about? Well, we told ya, what goes up, must come down.
And we warned ya that once there were "signs" of an "improving" economy, the crack heads would have to start weening themselves from all that free money pushing up the stock market. Well not free, but with zero interest rates, almost free.
Ooops, in Obama's fucked up Bizzarro World, good economic news is bad news for the stock market.
This is the watershed event. Watch smart investors start to slowly pull out.
Agreed 100%
If you really want to see how loose monetary policy can create a destructive bubble, you should study Greenspan's easy money policies under Clinton and Bush 43. Reagan's maestro, Greenspan, the famed collaborator with Ayn Rand, poured more money on asset markets than Obama or Bernanke could ever dream. Not only was the money supply over-expanded to counter the 2001 recession, but rate management and monetary policy were simply criminal (-we expect this under the Democrats, but what happened under Bush left a smoking crater over this nation that is unprecedented. It became very clear that the Bush/Greenspan partnership was fueling a dead economy with pure fiat money, creating an artificial boom so as to take the pressure off a failing foreign policy and win a 2nd term. This is why libertarians don't like giving politicians or the fed large financial levers, because it's too easy for flawed humans to use them corruptly. This is why the market should set interest rates or tether the money supply to something real).
The sad part is that Republicans, the party which claims to be financial responsible, tolerated Greenspan's antics for so long, especially when serving under a Republican president. Greenspan, against severe objections, kept lowering the target for the federal funds interest rate which began 2001 at 6.25 percent and finished the year at 1.75 percent, bringing the price of borrowing to a level that caused a toxic expansion of credit. Rates were held at 50 year lows despite pleading with Bush to take the hammer off Greenspan so he would stop using below-market rates to pump up assets with credit. And what about the dollar, which was destroyed under Bush, and had the effect of pushing not just the poor but the global pool of money deeper into "real" assets like houses (or securities tied to"real" assets). Never before was credit used to recklessly to stimulate an economy, and it is unclear that the USA will recover from this in my lifetime.
But here is what takes the cake. Watch this video if you really care about this issue. Listen carefully to Bush's plans to put more Americans - especially poor Americans - in homes. He literally spells out his plan for getting rid of things like down-payments so that people with zero assets can get into homes for nothing. He takes under-applied liberal policies that had been around for a long time and uses them to create the largest, most destructive bubble in world history. And yes, he created a temporary "prosperity bubble" and he got past Kerry. (Why do all politicians who go to Washington get sucked into Keynesian Temptation for their own political benefit? Why do we voters - at least the stupid ones - never criticize our side of the aisle for these things? Have we been reduced to mere cheerleaders who use issues like this only to attack the other side? How did we get here?)
In short, I agree with you. Easy money all too often leads to destructive bubbles, and Obama's economic policies were clearly designed to take care of Wall Street investors (not the poor, as many would have us believe). But let's face facts. Nearly all monetary policy
since Carter's Volkler was vanquished to make room for Reagan's maestro has been exclusively used to pump up stock values with fiat money at the expense of good old fashion savers.
) and hysterically.
