WHAT IS THE REAL RETURN ON STOCKS?
Try: JUST THE RATE OF INFLATION..... The real return and the nominal return could differ. Consider:
Stocks are an asset class in the economy. And no asset class can out perform the economy over the long term....assuming the economy is hermetically sealed. (But It isn't)
Return is therefore mostly a function of the MONEY SUPPLY, (the root of all inflation),......NOT some Miracle on Wall Street as the CNBC touts like to tell you.
There are no miracles in economics; Just assets, and the money to chase those assets.
Foreign trade can increase a nation's economy and raise the amount of wealth available to the economy.
But foreign trade is working AGAINST the US economy now.....the twin deficits are huge!
Which is the other big fallacy on Wall Street.
REMEMBER, AT SOME POINT IN THE FUTURE THESE BUSH "PRIVATE ACCOUNTS" WILL BE HIT BY A CORRECTION IN THE US TRADE DEFICITS. AND THAT COULD BE VERY UNPLEASANT.
----WHY? BECAUSE OF THE STRUCTURAL PROBLEMS DR. GREENSPAN FINANCED DURING HIS BIZZARO BUBBLENOMICS EXPERIMENTS OF THE 1990's----
RETURNS ON STOCKS COULD BE MUCH MUCH LOWER FOR A LONG TIME......UNLESS OF COURSE YOU RESORT TO HYPER-INFLATION TO GIVE THE ILLUSION OF MONEY WITHOUT WEALTH!
HYPER-INFLATION IS ALWAYS THE "LAST ACT" IN ANY THREE ACT PLAY ABOUT AN IMPERIALIST POWER!
AND THIS TIME WILL BE NO EXCEPTION.
