The Real Reason Why the Fed’s Easy Money Isn’t Helping the Stock Market167 views 2013-07-29 21:08 Tags: blank problem future target money
I tell you, Federal Reservechairman Ben Bernanke is risking the future of America with his free-flowing don’t-worry-about-the-future-generations strategy of pumping money into the economy. The problem, as I have said many times previously, is that people and companies have become so accustomed to the cheap money that the tapering to come will surely be difficult.
The Federal Reserve has pumped so much money into the system, but the problem is that gross domestic product (GDP) growth continues to be downright ugly.
Also Read: NYSE Holidays 2013
But Bernanke will be leaving the Federal Reserve in the next year for some plump speaking gigs, directorships, and other lucrative deals. He will be leaving behind a massive debt on the central bank’s balance sheet and a struggling economy. I really feel bad for the future generations who will inherit this debt. After witnessing what the Federal Reserve has done, it’s no wonder the youth of today don’t trust the governments.
The scary thing is the lack of GDP growth. Remember, as we all learned in Economics 101, that GDP is the combination of consumption, investment, government spending, and net exports.
We all know the governments are not spending, given their massive debts. Look at what happened to Detroit, a government that spent but failed to budget correctly. This will have an impact on GDP growth.