7 Charts That Prove That The Stock Market Has Become Completely Divorced From Reality
By Michael Snyder
July 28th, 2013
The mainstream media would have us believe that the U.S. economy must be in great shape since the stock market has been setting new all-time record highs this month. But is that really true? Yes, surging stock prices have enabled sales of beach homes in the Hamptons to hit a brand new record high. However, the reality is that stock prices have not risen dramatically in recent years because corporations are doing so much better than before. In fact, the growth in stock prices has been far, far greater than the growth of corporate revenues. The only reason that stock prices have been climbing so much is because the Federal Reserve has been flooding the financial system with hundreds of billions of dollars that it has created out of thin air. The Fed has created an artificial stock market bubble that is completely and totally divorced from economic reality.
Meanwhile, everything is not so fine for the rest of the U.S. economy. Economic growth projections have been steadily declining over the past two years, and the growth rate of personal income in the United States has been on a huge downward trend since 2008. The U.S. economy actually lost 240,000 full-time jobs last month, and the middle class continues to shrink.
So welcome to the “new normal” where most Americans struggle at least part of the time. According to one recent survey, “four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives”. Things are tough out there, and they are steadily getting tougher.