Since bottoming out at an intra-day low of 6,467 on March 6, 2009, the Dow Jones Industrial Average (DOW) has risen to 15,295 as of May 23, 2013 – a gain of approximately 130% in just over 4 years. The S&P 500 has shown similar results, advancing from an intra-day low of 666 to 1,650 for the same period, a gain of approximately 125%. Stellar returns.
As to why the markets have risen at historic rates during times of austerity economics? The answer is simple, it’s due to quantitative easing (QE) began by centralized banks after the market crash of 2008 – “fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy.”
The amount of stimulus used varies depending on your definition of stimulus, so we won’t bother keeping tabs on the trillions that have been dumped into the markets in the last 4 years. We’ll just make note that at present the Federal Reserve is continuing its unlimited quantitative easing program to the tune of $85 billion a month, a last resort, desperate measure that the FOMC began in 2012 to maintain its ‘growth’ targets.
As for the consequences of what is taking place, considering that “affluent households typically have their assets concentrated in stocks”, it’s a transfer of wealth from Main Street to Wall Street:
“In terms of types of financial wealth, the top one percent of households have 35% of all privately held stock, 64.4% of financial securities, and 62.4% of business equity. The top ten percent have 81% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.”
continued at: chycho