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.

 

The simplest answer is that printing new money out of thin air props up the transaction based industries for a short time. Flooding the market with new dollars enables commerce to boom until inflation sets in, consumer confidence plummets and the whole system collapses. If you hit the point of saturation then you get hyper-inflation like we've seen in Zimbabwe under Mugabe. The more the government does to "help" the worse the eventual outcome will be.

 

Historically speaking, the events in France that led to the reign of Napoleon are the textbook case of how fiat currency can destroy an economy. Here's a link to a free PDF that recounts the events. Page 59 has a nice table that shows the inflationary effect of the time in American currency. That a bushel of wheat went from 40 cents to 45 dollars in just 5 years should terrify us all for what's about to happen in this economy. 

 

https://mises.org/books/inflationinfrance.pdf

 

This looks and feels familiar too: 

 

"For this general distress arising from the development
and collapse of "fiat" money in France, there was, indeed,
one exception. In Paris and a few of the other great cities,
men like Tallien, of the heartless, debauched, luxurious,
speculator, contractor and stock-gambler class, had risen
above the ruins of the multitudes of smaller fortunes. Tallien,
one of the worst demagogue "reformers," and a certain
number of men like him, had been skillful enough to
become millionaires, while their dupes, who had clamored
for issues of paper money, had become paupers."

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