In a well-functioning free enterprise economy, capitalists invest their wealth in ways that create new wealth, and thereby enrich society along with themselves. What’s going on now, as these charts from the German magazine Der Spiegel show, is that capitalists are using their wealth to bid up the prices of real estate and corporate stocks, which are rising faster than the overall economy is growing.
This is not limited to the United States. It is part of a worldwide pattern. The only way it can end is with another financial crash.
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Click on the following links for an excellent two-part series by Martin Hesse and Anne Seith.
Part 1. Cheap Central Bank Money Contributes to Dangerous Bubbles.
Part 2. Feeding the Bubble, ‘Ignoring the Risks’
Tags: Financial markets, Real Estate Market, Speculation, Stock Market Bubble, Wall Street
December 5, 2013 at 11:14 am |
The facts that stocks are higher than they were pre-recession is an obvious sign to me that there is a problem. There was an admitted bubble at that time, but for some reason it is now “a sign that the economy is improving”. I have the dreadful feeling, though I hope I’m wrong, that we aren’t out of the woods yet.
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June 21, 2014 at 4:06 pm |
The Socialist Myth of Economic Bubbles
http://iakal.wordpress.com/2014/06/21/the-socialist-myth-of-economic-bubbles/
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