Sunday, March 24, 2013

Risky Assets Are Already In A Bubble

http://www.safehaven.com/article/29231/equity-bubble-is-based-on-unsustainable-earnings

"If market forces were allowed to prevail and the government permitted the economy to deleverage, earnings of U.S. corporations would be in a depression. And the price to earnings ratio would reveal that stock prices are already in a bubble. A bubble that is only becoming more dangerous with each day of the Fed's money printing."

5 years of intervention and historical stimulus and manipulation. The Federal Rserve is in uncharted territory and admits it is making it up as they go along. So, a room full of men can make decisions effecting the whole country, the entire world population?
                            And there are NO checks and balances for this room full of men?

This room full of men, known as the Federal Reserve, can set interest rate policy and they serve no man, no country, no President, answer to no one?

If printng of $3 TRILLION and flushing it into risky assets has helped corporate profits, stabilized housing, improved home prices, improved Consumer sentiment, then what will happen when this can no longer be done? If this is not a grass roots movement, if the economy and markets cannot stand on their own 2 feet, what will happen when these policies are reversed?

At the moment, there is little in competition with rising asset prices, as the SAVER has been rubber hosed. A $MILLION in a savings of MM account will net you about $100 !!! A $100 return on your $1 MILLION????

I keep hearing radio ads for seminars which will teach you how to ???? FLIP HOUSES!! WTF???
25% of homes bought are from "investors", not new home owners, this is a huge %. 0% rates,
3% mortgages come with a price...CHEAP MONEY COMES WITH A PRICE. That price is the deleveraging processs was not allowed to take place and the HEALING needed to reset economy has not taken place, what we have instead in the steady IV DRIP from the FED RESERVE.....and other CB'S.

If you think we are at beginning of some new great movement, a new great bull market and SOUND economic expansion, then fear not. If however, you question the current environment, understand how we got here and realize it is NOT ORGANIC, then while you are eating your Organic baby spinach salad, and roasted veggie pizza on a gluten free crust with tofu cheese.....think carefully what you are doing and consider other outcomes are possible in the future other than the rosy scenario.

D

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