Stock Market Highs Should Scare You



I received this CNN News blast today and it should frighten you:

The Dow hit a new record high today, topping 14,264. The previous record was 14,198.10, set in October 2007, when investors were squarely focused on the Federal Reserve. The Fed had cut rates for the first time in four years and was worried the housing implosion would hit consumers and the broader economy.

Today, the Fed’s actions have juiced stocks and helped boost the economy, but the recovery after the 2008 financial crisis remains slow-going.

Investors appear to have shrugged off the fight over $85 billion in forced government spending cuts. The Obama administration has started making the cuts and some federal workers are getting furlough notices.

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The stock market loves it when the Feds pump funny money into the system because they are making money.

The Feds are turning bad assets into cash larger than their value.  They are monetizing the debt. The Feds also have a monthly $85 billion dollar bailout going on into infinity.

The only reason the Feds are doing this is because the economic news is bleak and the system needs propping up.

Eventually, this all will come to an end and the reversal with possible stagflation will not be fun.

There is an asset bubble which, oddly, most economists deny. According to Zerohedge, the Feds balance sheet will hit about $4 trillion this year. Don’t forget that the interest rates are almost zero and they can’t stay that low forever.

The good news is that Sequester had zero effect on the markets!