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What Do Interest Rates Tell Us About The Economy
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
streettalklive.com / By Lance Roberts / April 8, 2013
Last week I discussed the disconnect between the markets and the economy stating that:
“Since Jan 1st of 2009, through the end of March, the stock market has risen by an astounding 67.8%. However, if we measure from the March 9, 2009 lows, the percentage gain doubles to 132% in just 48 months. With such a large gain in the financial markets we should see a commensurate indication of economic growth – right?
The reality is that after 4-Q.E. programs, a maturity extension program, bailouts of TARP, TGLP, TGLF, etc., HAMP, HARP, direct bailouts of Bear Stearns, AIG, GM, bank supports, etc., all of which total to more than $30 Trillion and counting, the economy has grown by a whopping $954.5 billion since the beginning of 2009. This equates to a whopping 7.5% growth during the same time period as the market surges by more than 100%.”
The reality is that the economy has been growing very weakly since the end of the last recession. The post-1980 norms of 5% annual growth has remained an elusive target despite the Fed’s continued monetary interventions. As stated above, since the end of the last recession, the economy has grown at roughly 1.7% annually despite trillions of dollars of injections which have boosted Wall Street but has done little for Main Street. The chart below shows the decline in “nominal” GDP growth since 1962.
Thanks to BrotherJohnF
2013-04-08 15:02:00
Source: http://silveristhenew.com/2013/04/08/what-do-interest-rates-tell-us-about-the-economy/
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