Wednesday, May 4, 2011

Doug Casey On The Economy, Stock Market, Precious Metals and the Dollar

Short excerpt below on the stock market and the phony baloney "recovery":

The only things that are doing well are the stock and bond markets. But the markets and the economy are totally different things—except, over a very long period of time, there's no necessary correlation between the economy doing well and the market doing well. My view is that the market is as high as it is right now—with the Dow over 12,000—solely and entirely because the Federal Reserve has created trillions of dollars, as other central banks around the world have created trillions of their currency units. Those currency units have to go somewhere, and a lot of them have gone into the stock market.

As a general rule, I don't believe in conspiracy theories and I don't believe anything's big enough to manipulate the market successfully over a long period. At the same time, the government recognizes that most people conflate the Dow with the economy, so it is directing money toward the market to keep it up. Of course, the government wants to keep it up for other reasons—not just because it thinks the economy rests on the psychology of the people, which is complete nonsense. Psychology is just about the most ephemeral thing on which you could possibly base an economy. It can blow away like a pile of feathers in a hurricane.- Read the rest: Doug Casey: Precious Metals vs. the USD

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