Shock: Almost All Stock Growth Since 2008 has Been Due to QE
Quantative Easing (QE) is a manner in which the Fed buys bonds in order to inject cash into the financial system. It’s supposed to spurn investments and capital growth. The issue is it’s just another form of printing money that artificially inflates assets since these banks turn around and invest that money into the stock market (or whoever they lend it to does).
A shocking chart came across my screen just now that shows that when you divide the S&P 500 vs the Fed’s balance sheet (which is to say how much money the Fed has printed), the correlation is almost exact and the value of the market is also flat.
All stock market growth since 2008, with small exceptions, has simply been the result of the Fed printing money and injecting it into the markets.
This is a shocking and horrifying realization that no actual stock growth has occurred and if anything, the market is worth less than before 2008. Asset prices are simply inflated due to an overabundance of capital to be invested. Perhaps the worst part is this only has benefit the holders of stocks, which a large majority of are banks and wealthy individuals. None of this money has gotten to Main Street.
