Sunday, April 7, 2013
Here's another neat one:
The more the Fed prints/borrows (QE) the greater the debt/liquidity and the greater the illusion that a self-sustained recovery is right around the corner.
But there is still 0 money velocity in the US economy. The chart above explains why.
If real inflation were counted into the GDP deflator we'd have been in a recession for over 5 years. That's a depression.
But the stock market's at an all time high. How can that be?
All that debt/liquidity donated to the banking system has to go somewhere.
The Fed hopes that if the market is high people will feel rich and spend.
That's the whole plan.
Do you feel rich?