$800 BILLION!
That's the amount of money China's reserve adjustment is putting into the market in 2015. “Beijing is trying to stimulate lending and they are trying not to use strong measures,” said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong. “Policy makers across the globe are trying to boost demand by increasing bank lending, especially to businesses.” In other words MORE FREE MONEY – for the top 1%.
As you can see from the CNN chart, $800Bn is really just a drop in the bucket but it all ads up as Global Stimulus since 2009 is now approaching the $20Tn mark, or about 5% of Global GDP per year for the past 6 years. Since Global GDP growth is still less than 5%, you can imagine what would happen to us if we DIDN'T get another $3-4Tn this year, so China is simply doing their part with a timely announcement of next year's contribution.
Unfortunately, the situation for the bottom 90% continues to deteriorate but, fortunately, none of them can even afford to read this article because they have to get up and work more hours for declining wages so we (the top 10%) can make more money even though we're selling the same amount of stuff for the same prices.
Of course, the joke's on all of us as even our money is being paid to us in devalued currencies. The Dollar had a good year but it still doesn't buy what it did in 2007 and the last time the markets were as high as they are now was 1999, when the Dollar index was at 120 – more than 20% higher than it is today.
So, if you are getting $208 for a share of the SPY (S&P 500) ETF because the S&P is at 2,080, that $208 only buys you about $165 worth of stuff in 199 terms. SPY was only $150 back in 1999 so you are a bit ahead – just not as ahead as you think you are.
More stimulus means more money for the top 1% and we now have SO MUCH MONEY that we are trickling it down on the next 9% and they are starting to do well enough to sprinkle a bit on the next 10% but, below that – as you can see from the Real Wages Chart – things are still not good and getting worse.
