printSome in mainstream media are making good progress in connecting Ben Bernanke’s non-stop monetary stimulus to a rise in all prices, stock-market prices included.
The Fed’s monthly confetti of funny-money stands at “$85 billion total every month.” The Fed’s balance sheet reflects “more than $3 trillion.”
The Fed, explains Elizabeth MacDonald (Fox Business News), purchases mortgage-backed and Treasury securities from Fed dealers.”
You can see how hooked the market is to the central bank’s money printing — the correlation in fact is rather astonishing. It shows the government and the central bank’s power to create money, manipulate market prices, and transfer wealth. The market is powered ahead by a growing strength in corporate profits, too.
Richard Fisher, president of the Federal Reserve Bank of Dallas, is more than hip to the “monetary Ritalin” scam:
…And, for some, there is a deeply imbedded worry that the Fed’s contortion of the yield curve and cost of money cannot last forever, or, if it lasts too long, will eventually result in financial bubbles and/or uncontrollable inflation, adding another uncertainty to the plethora of uncertain factors that already plague them. “Credit is super-abundant and stock market behavior is conditioned not so much by the fundamental performance of its underlying companies but by increasing doses of monetary Ritalin.
Then again, if you listen to the likes of Shepard Smith (also on Fox News) or Brooke Baldwin (CNN) expatiate on the topic of a stagnant economy against the backdrop of soaring stocks—you’ll hear their extra curricula exhortation for The Ben Bernanke to keep those interest rates low. Lovely!