Paper wealth, the stock market makes people “feel” rich. So they will spend, but. But what happens when that doesn’t work.
Has anybody paid attention to the stock market volumes? The little guy has left the room, so to speak. Volumes are extremely low, compared to normal.
Stripped of all the acronyms and economist-speak, government policy of the past few years has been simple: lower interest rates to push people out of cash (which yields nothing) and into stocks and houses. And then, when those assets go up enough to make their owners feel rich, hope that this paper wealth translates into a willingness to max out credit cards and take out car loans.
Only fools fall for this Big Government trick. Does anybody remember the housing bubble?
Spending whatever it takes, to get incumbent’s reelected is a false promise of Big Government. And a phony economy.
Remember the Soviet Union … just because you can doesn’t mean you should. And people’s existence under their rule of Russia was near nonexistent. Just try and survive from day to day. Not much hope, not much change for the ones who were not the elites.
And the hook — As interest rates rise, it makes Big Government’s massive debt unsustainable.