The Phaserl


Fed Abandons Stock Markets

by Adam Hamilton, Gold Seek:

The seemingly-invincible US stock markets powered higher again last year, still directly fueled by the Fed’s epic quantitative-easing money printing. But 2015 is shaping up to be radically different from the past couple years. The Fed effectively abandoned the stock markets when it terminated its bond buying late last year. So this year we will finally see if these lofty stock markets can remain afloat without the Fed.

Mainstream stock investors and speculators are certainly loving life these days. The flagship S&P 500 stock index enjoyed an excellent 2014, climbing 11.4%. And that followed 2013’s massive and amazing 29.6% blast higher! The last couple years were truly extraordinary and record-breaking on many fronts, with the US stock markets essentially doing nothing but rally to an endless streak of new nominal record highs.

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3 comments to Fed Abandons Stock Markets

  • Ed_B

    The US stock market has been fueled by cheap and even free money from the Fed for the past few years. The market was artificially levitated via this means, as can be shown by the fact that it reached ALL TIME HIGHS during what was, at best, a tepid economy. IMO, the true value of this market was virtually doubled by these manipulations. While this certainly helps the ownership class, it doesn’t help the country or the 60 or so percent who do not own any stock shares. It also doesn’t do anything for the economy of the nation, other than serve as a feel-good mechanism for those who do own stock shares via their employee retirement plans. A true and fair market value for the US economy and the stocks of the companies that participate in it is much closer to 9,000 than it is to the current inflated 18,000. A 50% pull-back would not surprise me a bit. Neither would the market continuing to rise due to Fed bond buying. While the Fed has supposedly ended its overt bond buying program, it probably continues its covert bond buying program via proxies, such as Belgium, and now Japan.

    The real problem with the US and other Western economies now will not be solved via band-aid fixes like the Fed’s QE programs. These do nothing to repair the broken structure of the US economy or its corporate shares. IMO, the REAL problem we face today is that the economy is being poisoned by a toxic over-dose of government. We simply have too much government with too many laws, rules, regulations, taxes, fees, and people involved in the unproductive activities of government. This goes largely unrecognized by those in the various levels of government but is particularly onerous in the US Gov. Recently, those in the Fed Gov have tried to address this problem via the only solution they know… more government. When one is losing blood, they will not be helped via removing more of the blood that remains, yet this is the “logic” that is applied to this problem. Government needs to be about 1/3 its current size and people need to have the liberty to create new businesses because it is these businesses that create the jobs and the wealth upon which ALL else depends. Government is not the answer. It is like salt on our food, where a little is much better than none or a lot. Unfortunately, it is now being treated as if it was a staple and it is not. The government that governs best, governs least, IMO.

  • Timco

    I have known Adam for yeas. I can promise you he does the exact opposite with his portfolio that he advises you to do.

  • gary hillerich

    and invest in military & medical industrial complex & GMO ‘DEATH’ stocks? & by doing so, handing over your soul to beeleezabub?..thanks,but no thanks..I’ll stay poor & wait for PM’s[God’s money] to take flight,& keep my soul for the heavenly gates & eternal life that awaits those that repent their sins,be re-born again,giving their heart & soul to the Lord & Savior,Jesus Christ almighty..

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