15
Jul
09

the bernanke bubble

great wsj on how the stock market ‘rally’ of the past 6 months is nothing more than a massive money bubble inflating stocks & commodities.

excerpt:

“In mid-May, Mr. Bernanke’s outlook seemed to change. Maybe he didn’t approve of the sharp housing rebound — like we need more houses! Maybe he saw inflation in commodity prices — oil popping to $72 from $35. Or, more likely, he finally realized that he was the market and took his foot off the money accelerator, as evidenced in the contracting monetary base (see nearby chart). Sure enough, things rolled over — the market dropped 7.5% from its peak, oil prices dropped almost 17%, and even gold has lost some of its luster. But in July, the Fed started buying again and the market rallied.”

http://online.wsj.com/article/SB124762005061042587.html

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