“The stock market’s roar to record highs Tuesday reflected the Federal Reserve’s massive easing campaign, not the strength of the U.S. economy, says financial commentator Robert Wiedemer, best-selling author of “Aftershock.”
The Dow Jones Industrial Average rallied 125.95 points, or 0.9 percent, to 14253.77, surpassing its previous record closing high of 14,164 set in October 2007.
“Fed money-printing is important” for the stock market, Wiedemer tells Newsmax TV. “The economy isn’t doing particularly well. This isn’t the economy of 2007; we all remember the boomy times then.”
Indeed, the economic recovery is “100 percent fake,” he says. “It’s built on Fed money-printing and government borrowing. Both are at record levels. That’s absolutely crucial to this market rally.”
The Fed has added more than $2 trillion to its balance sheet over the past five years through quantitative easing and has pushed short-term interest rates down to near-record lows.
Still, the economy expanded only 0.1 percent in the fourth quarter. “And more important for companies reporting earnings, much of the world is in recession, and that’s affecting a lot of S&P 500 earnings,” says Wiedemer, a regular contributor to Financial Intelligence Report, the flagship investment newsletter of Newsmax Media….”
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