I've got a political/economics question

The US market is booming because of a bubble, specifically that artificial manipulation of interest rates (Quantitative Easing) has made traditional investments such as CDs, treasury bills, etc, near worthless as investments.


Official interest may be very low but inflation is out there and higher than interest. That means money sitting in investments paying the official rates give you less buying power than investing in a stable stock which pays dividends.


The problem with all of this is that money will leave the stock market pretty damn quick when another investment arises which has a decent return on investment without suffering from market volatility like stocks.

quote:

---

Printing money like crazy to keep interest rates down means everything goes into the stock market.

---

That and the relatively weak economies worldwide cause overseas investors to seek safe havens for their money. US Stock Market is the safe haven.

quote:

---

The US market is booming because of a bubble, specifically that artificial manipulation of interest rates (Quantitative Easing) has made traditional investments such as CDs, treasury bills, etc, near worthless as investments.

---

Thanks. But aren't the other developed nations doing the same thing? Are their stock markets not experiencing a bubble?

quote:

---

FTR, its not just the US that is printing money - japan and europe are running those presses too. And their stock markets have struggled.

---

The Federal Reserve have mothballed the printing press. Thus, a stronger dollar compared to other currencies and a factor for lower gasoline prices.

quote:

---

The Dems point to the booming stock market during Obama's 6 years.

---

The Dems love the 1%.

quote:

---

If not, what's the difference between them and the U.S.?

---

quote:

---

The GOP points to the dismal jobs picture during Obama's 6 years and the near flat line growth rate since the recession. The Dems point to the booming stock market during Obama's 6 years.

---

I'd say people are parking cash anywhere they can to get a higher return, including stock market, NNN CRE deals, and low grade rental properties.

The idea that the stock market's performance is an indicator of the economy might have worked in a more simplified economic environment, but with government controlling the price/return of money in cash equivalent investments, people are chasing return. Watch cap rates. They're getting pretty darn low again.

ETA: The CAPM has shown itself to be inadequate as a risk pricing tool in ultra-low rate environments, IMO.

quote:

---

there's no other viable option

---

Correct.....no other place to invest

quote:

---

The GOP points to the dismal jobs picture during Obama's 6 years and the near flat line growth rate since the recession

---

You're living in the past:

quote:

---

On Tuesday, the Bureau of Economic Analysis released its second estimate of real gross domestic product for the third quarter of 2014 — covering July, August and September of this year. The release showed output in the U.S. increasing at an annual rate of 3.9%. This is relative to the second quarter when real GDP gained 4.6%.

---

quote:

---

Joseph Lake, U.S. analyst for The Economist Intelligence Unit, described the U.S. economy as “in rude health, outperforming most countries in the developed world.” Lake pointed out that the U.S. economy has grown at an annual rate of more than 3% for four of the past five quarters, which he says suggests the country “is finally casting aside the shackles imposed by the financial crisis.” While the growth was distributed across most components Lake noted that government spending and net exports were among the strongest gainers but “their momentum is unlikely to persist.”

---

LINK



If a Republican were in office, you guys would be dancing in the streets.