And Wall Street is playing along by responding to every tidbit of news to run up the DOW. (But these are institutions and funds playing the speculation to deliver good numbers. These trades are based on perception rather than real value.)
All this Fiscal Cliff talk only nibbles at the edges of the problems. Key among them are government debt and our valueless money.
According to Washington, the Holy Grail is GROWTH. The QE3 program, for example, was initiated to stimulate housing growth. The assumption of QE3 is that people won't buy/build houses because the interest rates are too high. Since when is a 4% mortgage rate too high? And how is qualifying buyers based on a 3.5% rate good for the market? Didn't we just have a collapse because people were in homes they couldn't afford?
But the conventional wisdom says more mortgages, more jobs, more money in the economy...
But even if you are successful in getting more people qualified to pay a mortgage, how does that fix the problems of government spending, public sector pensions, a service economy that doesn't work and the national debt?
Well, in a few words, it doesn't. It just makes the bubble larger and thinner.
