stock_creeper's  Instablog

We’re still the era of infinite wealth creation (if for only a few)….an era that began in 2001 with the war in Iraq/Afghanistan (an occupation that will likely never end because it’s good for the economy and good for stocks), a BRIC economic boom, perpetually low rates, and perpetual gains worker productivity. The trend began in 2001-02 and was accelerated following the financial crisis. In fact, the crisis was so beneficial for multinationals and Wall St. that perhaps is was premeditated.

Put yourself in the shoes of the fed and pretend it’s 2004 or 2005 and you have this massive surplus from booming BRIC countries buying up your treasuries, yet you can’t lower rates because every economic indicator is hunky-dory. Unemployment is at 5%, housing is doing great, etc. The act of aggressively lowering rates in response to BRIC induced deflationary pressures when the economy is supposedly doing great in terms of leading indicators would hurt confidence. S&P 500 companies are whining they have all these costly employees on their payroll but because the economy is doing so great they can’t find a good excuse to fire them, so profit margins stagnate. And Goldman, the most powerful investment bank, is whining that they have too much competition from likes of Lehman and Bear Sterns. Bank of America is tired of WAMU and Countrywide etc.

So you create or trigger a financial crisis to get the fed to lower rates to 0% forever (solved), purge the payrolls of slow, redundant employees (done), make existing employees more productive for fear of losing their jobs (done), make Goldman the only investment bank in the world by eliminating the completion (done). And then with rates at 0% forever and perpetual government simulative spending in the form of tax cuts, Medicare, social security, pre-emptive war & endless occupations, national security you have the ingredients an economic, stock market, and technological boom that is underway now and will not relent anytime soon.

A conspiracy? Or a series of paradigm changing economic events that just happened to coincide in 2008?

The stock market is reality. Lessons will not be learned. Excess cannot be tamed. The gains made from linked in IPO are locked in for good. Linkedin is going to $200 soon. Facebook could be worth a trillion dollars within five years based on stock valuation. I’m still bullish on gas prices, commodities, tech stocks, rare metals like rhodium, industrials. The  evidence says the crisis was a conpiracacy to make a few wealthy. Buy stocks and join them or atleast improve your financial standing.