Tuesday, January 14, 2014

Stock Market Bubble

2013 Investment Company Fact Book – 53rd Edition

(ICI) With $13 trillion in assets, the U.S. mutual fund industry remained the largest in the world at year-end 2012. Total net assets increased $1.4 trillion from the level at year-end 2011, boosted by growth in equity, bond, and hybrid fund assets. Demand for mutual funds increased in 2012 with net new cash flows of all types of mutual funds totaling $196 billion. Investor demand for certain types of mutual funds appeared to be driven, in large part, by a continued trend toward investment diversification, the demographics of the U.S. population, and uncertainty surrounding the year-end fiscal cliff. Inflows to bond funds were quite strong and net withdrawals from equity funds picked up—their fifth consecutive year of outflows. Hybrid funds remained popular with inflows increasing again in 2012. After three years of sizable outflows, money market funds experienced a small net outflow of less than $500 million. This slowdown in net redemptions owed in large part to investors moving to cash at year-end because of fiscal cliff concerns.
Source: Money and Markets, Larry Edelson, 1/13/14, Trillions flowing into the U.S. stock market.  Article Source: http://www.icifactbook.org/fb_ch2.html Data Source:  http://www.icifactbook.org/pdf/2013_factbook.pdf

Comments:
The information in this report suggests that the stock market bubble may continue to grow for a while. The reasons have less to do with the value of stocks and more to do with the fact that for many investors, there is no place else to go.

The wild cards remain tied to the value of the dollar and its use as the international trade currency. Other countries are abandoning the use of the dollar in favor of their own currencies.  Another wild card is politics and whether or not “trickle up” redistribution of wealth will continue up to 2017. That’s the link between Democrats, RINOs and the Wall Street and International banksters, who want to preserve the bailouts and tax breaks.
Gold had its ride, but retreated due to reasons that were mysterious to all but the puppet-masters.  But gold and silver are rising slowly from their lows.  Fixed returns remain fairly flat, because Interest rates are being held low by the Fed to accommodate government overspending.  The Fed is on a path to increase the money supply by 400%.  But inflation is being held low by decimating the economy, decreasing workforce participation, holding wages low, and impoverishing the population. 

Obamacare is encouraging employers to reduce employee work hours to 29.5 per week.  Government unemployment and inflation statistics are bogus, so you have to go to the workforce participation % to measure unemployment.  The government inflation calculation is crafted to exclude entire categories of cost increases so inflation is under-reported on purpose.   The increase in gasoline prices were off-set by decreases in home values but all service and utility bills never stop increasing.   The U.S. GDP is quietly shrinking,
Individual investors reduced their exposure to the stock market in 2011 and 2012, but the puppet-masters sold their gold and invested the bulk of the $1.4 trillion inflow that took the U.S. stock market to the $13 trillion mark.

There are a number of things that need to happen to reverse the U.S. citizen impoverishment plan.  First, Obamacare must collapse and we need to remove Democrat control of the Senate in 2014.  Paul Broun is the best candidate for Senate in Georgia.
Second, in order to increase jobs, immigration needs to be reduced. Federal corporate taxes and regulatory overreach need to be reduced.  We need to keep our coal-fired and hydro-electric power plants.  Oil and natural gas production and distribution and all other production needs to be unleashed.   

Third, we need to prepare to close the EPA, DOE and other federal agencies and send these to the States.  We need to quit the U.N. and make Agenda 21 implementation in the U.S. disappear.   In 2017, we need to repeal bad laws, cancel bad executive orders, cancel bad trade agreements and cut $1 trillion from federal spending.  The only Presidential candidate for 2016 I know will take these steps is Rand Paul.
Norb Leahy, Dunwoody GA Tea Party Leader

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