The Safety Dance

"Say, we can act if we want to If we don't, nobody will And you can act real rude and totally removed And I can act like an imbecile" The rocket ride has been a lot of fun for a lot of suburbanites who commute to the cities to do their soul crushing jobs so that they can build up the precious 401k balance but I think the wealth effect is in jeopardy.

The Fed pays close attention to consumer confidence. At the moment, whitey knows that inflation is higher than the Fed claims and that while he's making more today, he's also required to pay more (for everything). In some cases, substantially more than he did 1 to 2 to 3 years ago. If his 401k becomes a 201k, bye bye wealth effect. Our economy is based upon real goods and services but it is also based upon a lot of smoke and mirrors - misguided trust, gullibility and more importantly, confidence.