Economics 101 & The Stock Market Bubble
As a professional trader in my prior life (between the years of 1997 – 2019) I became conversant with the stock market and learned the truth about Wall Street. I was fortunate to become financially independent enough to start my own financial planning firm – Shore Financial Planning, located in Monmouth Beach, NJ.
Throughout my career as micro-cap portfolio manager I have witnessed several boom & bust market cycles and market crashes (dot-com bust of 2000; September 11, 2011; housing bubble of 2008).
My real-world experience as a CPA for hedge funds & professional market maker, I have learned first-hand insights into the dirty sercrets that Wall Street leverages to enrich themselves from investors. They prey upon everyday Americans through legal theft buried in fine print on wholesale level through high fees that are forced onto many unsuspecting 401k participants.
The Federal Reserve has created a toxic and dangerous precedent of an economy and stock market dependent on low-interest rates.
Congress now spends U.S. dollars in trillions. It seems like decades ago that billions of dollars was a big deal. Since Covid, ,trillion is the new billion of dollars!
In a free market system you can not print money and provide goverment hand-out without economic consequence. The quandry that the Federal reserve now faces is that IF/WHEN it raises interest rates to address runaway inflation that IS HERE, how can the U.S. finance/service our debt load?
The Federal Reserve has had its hand on the scale of the stock market for the past 12 years creating bubble after bubble. It
Congress
The Federal Reserve, Politicians, CNBC & Wall Street In March-April of 2019 when the market began to correct they forced
- Zero Interest rate Policy
- Purchases of Mortgage Backed-Securities = Open Market
- Purchases of Corporate Bonds = Open Market
- Unlimited buying power = Printing of Money
- Unlimited Oversight – Never audited
- Etertnal time horizon – Never sell
Today we learned that 2 Federal Reserve Officials have been actively trading stocks & ETFs!!!
“Sell when you can not when you have to”
“Feed the ducks while they are quacking”