Tuesday, January 22, 2013

The Stock Market

  It is a reactionary unit, an entity made up by the lives of the people who invest in it! As you may have noticed, the market doesn't anticipate in regards to our coming financial ruin? But what it does do, is react! It is not that Wall Street is unaware of the lunacy of this out of control spending, they are! Because, the investors who make up this financial endeavor, come from all three main groups, The rich, the poor, and the largest group, the middle class. So how then do we understand what is happening today, how is it that Corporate profits soar, while the economy is so bad, and it's prospects are even worse?
  There are two reasons primarily, each tied to the other by the circumstances which created it. Again, financial markets only react to the financial climate that exists, they do not create it! In short, There is always a way to make a buck! So what is the financial reality, of this, our current time?                       Our unemployment remains at record levels, which means, less people working, less money is being spent, as the middle class tightens it's belts. so Corporate America adjusts for this, by hiring less people, which means even less spendable cash, and so on, round and round it goes, in an unending self perpetuating circle! What the trained investors know, is how the middle class will spend it's money, even in a depressed economy like this one. The average investor, only reacts to the trends that the large investors start in motion, by the dollars they invest, and where they invest it?
  Now, the opposite is also true! In a healthy economy, all people spend more, which means that companies must produce more, so they must hire more, which increases spending, and so on, and then the market reacts to that financial climate, as it self perpetuates itself!
  The biggest problem in all of this, is a government who inserts itself into the market, because contrary to what many seem to believe, government can not create wealth, because government can only take it! The plain fact that is apparent to any fair minded person, is that government, especially one who is self creating, can not produce wealth, it can only consume it! In truth, as much as you might hate the cliche, government is not the answer, but it can only be the problem!

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