My friends, there is no secret as to why above Reuters story line is true? The FED has been setting our money supply awash in liquidity.
History of MONEY from this link :
"In a fiat monetary system, there is no restrain on the amount of money that can be created. This allows unlimited credit creation. Initially, a rapid growth in the availability of credit is often mistaken for economic growth, as spending and business profits grow and frequently there is a rapid growth in equity prices. In the long run, however, the economy tends to suffer much more by the following contraction than it gained from the expansion in credit. This expansion in credit can be seen in the Debt/GDP ratio. We track the bubbles created by this expansion of debt at the inflation / deflation page. "
Normally when the FED tightens GOLD falls
THE FED. NO mention of this ACT of COngress in 1913 being Unconstitutional
2001 from THE STREET.COM
In the present case, however, there is evidence that such a reinflation of the tech bubble will not happen. Using the market as a proxy, it appears that the money is going where it needs to go. While the initial public offering plans of start-up tech firms continue to get withdrawn, there has been a pickup in energy- and power-related companies going public. Tuesday Aquila (ILA:NYSE), a wholesale energy producer, saw its shares gain nearly 25% in its IPO. Friday Reliant Resources, the regulated energy business of Reliant Energy (REI:NYSE), said that it would up its IPO offering price to $28-$30 a share from $26-$30. Originally it had planned to offer its shares at $15-$17.50. Meanwhile, Calpine (CPN:NYSE), a California-based power company, on Tuesday night sold $850 million in 20-year convertible bonds with the highly favorable interest rate of zero.
All this is for the good, of course. Because the money the Fed is pumping into the economy appears to be going to companies like Calpine, we can be assured that the nation's power capacity problem will soon pass. And we know that, hangdog from the experience in technology stocks, investors will never allow themselves to move to excess again, never allow the creation of another equity bubble. Right?
**YEAH RIGHT! double bubble anyone?
Duratek opex Friday here we come!
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