Quote:Can anyone explain how the S&P has literally doubled under Obama, yet the economy is on the tank? I am serious. I don't fully understand how that can be. I always thought the S&P was a barometer of how the market was performing. Where is the economy major that can shed some light? I have asked others about this and not gotten anything that makes sense to me.

 

To understand the Why you need to understand the How.

 

How the market works that will help you understand why it goes up and down. The S&P is based upon the ability to invest and for investors to receive a return, therefore the S&P will always be up when capital is injected into the market place, it doesn't matter where that capital comes from just that it is simply there. Under Obama and Bush starting after 2008 you saw Federal manipulation of the markets, interest rates have been kept at historical lows and QE Unlimited is being used to literally print money for the sole purpose of injecting capital into the market place.

 

the problem and you'll find this in any major publication is when the Federal Reserve stops printing money to inject capital into the market place it will create a huge vacuum that will inevitable drop trade and investments lowering the S&P. The alternative is to continue printing money at unprecedented levels which will create inflation. It's being argued in many circles that the Fed wants inflation it will hurt the average citizen but it significantly reduces the burden on the Fed in the form of foreign loans we owe. China is getting wise to this trick and started investing heavily in Gold a couple years ago, thus the surge in Gold.

 

It's what happened in 2008, for nearly a decade the Feds propped up the Sub-Prime Mortgage industry through Fannie Mae and Freddie Mac, once the money couldn't be shuffled anymore and the loans began to fail the market crashed. 

 

Right now the S&P is a ticking time bomb, my advice to anyone still in the markets is to take your lumps pay the penalties and get out. Whats coming will make 2008 look like child's play. 

---