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Feb. 22, 2011 - PRLog -- Regardless of last week’s bewildering employment information, the growing threat of an additional decline in house values, political uncertainty in Egypt and also the broader Middle East, and sharp pullbacks in some emerging markets like Brazil, US stock markets continued to rise. It occasionally appears that Wall Street exists in a bubble that's well insulated from the tough and tumble of the outside world. Yet, in what might be a harbinger that America’s era of prosperity is winding down, the hallowed New York Stock Exchange, lengthy the epicenter of American economic may, is expected to be bought by Germany’s Deutsche Boerse. As soon as the king is so unceremoniously uncrowned, it can't be long prior to investors observe how shabbily dressed he truly is. Visit http://silver-dollar-values.com for more silver prices and gold coins tips.

Previously this month, the Bureau of Labor Statistics disclosed that the unemployment rate had fallen from 9.4 percent to 9.0 percent. Many within the monetary media seized on the report and included it together with lately released information on improved consumer sentiment as fantastic news for the economy. Nevertheless, the report only showed 36,000 new jobs produced, far much less that the 146,000 that economists estimate required to be created to reduce unemployment considerably. No matter, US stock markets persisted to rise.

One should keep in mind that the unemployment figure excludes those that have given up searching for jobs altogether. The portion of Americans who have jobs continues to get smaller. By factoring back in those that have left the work force over the last couple of years, a lot of economists have concluded that the actual unemployment rate is nearer to 20 percent. CLICK HERE to check out Silver Dollar Values Silver Prices now! http://silver-dollar-values.net has all of the details for an intelligent investing choice.

The housing marketplace also shows fresh indicators of enduring tension. According to a report unveiled last week, utilizing information as of November 2010, almost one third of US houses are now worth much less than the amount payable on their underlying mortgages. Obviously, given this harrowing figure, defaults continue to rise. The cost of the average home is now at a ten-year low and continues falling.

Because of this evidence of greater unemployment and continued erosion within the housing sector, it's tough to see any probable recovery in consumer demand within the short term. With out such a rise, it's tough to justify any short-term run up in buyer sentiment and stock costs. But both have carried out just that. From my viewpoint, this symbolizes a major monetary disconnect.

Working under previous Fed Chairman Greenspan, Ben Bernanke aided to engineer the largest asset rate of growth in history. The natural outcome was the credit crunch of 2008, from which we today are still attempting to recover. Nevertheless, Bernanke has been reluctant to accept ongoing recession. Obviously, he is driven to stimulate the economic climate, not by stimulating consumer demand, rather by inflation.

The government stimulus packages and quantitative easing plans have produced a massive shot of liquidity. In addition, the Fed’s manipulations of interest rates has pressed investors into riskier assets, like equities and commodities, and out of fairly secure investments, like gold, silver, precious metals, bank deposits and bonds. This abundance of inexpensive money is making an unnatural asset boom, and it's the primary reason why equity costs have risen.

In the mean time, the political issues in Egypt have induced smaller investors to briefly fear political hazards in emerging markets, regardless of their having much better fundamentals than the US. I anticipate this dynamic to rapidly reverse as the demonstrations settle in Cairo. CLICK HERE to check out Silver Dollar Values Silver Prices now! http://silverdollar.cc has all of the tips and details for an intelligent investing choice.

In a nutshell, the continued increase in US equities seems to be stimulated not by lasting US consumer demand, but by inexpensive government-supplied liquidity, along with a temporary diversion from the emerging markets. This qualifies much more as a splash over than a wave. The tide is nevertheless drawing investment capital to the developing world.

The large question investors ought to ask themselves is: for exactly how long can the rise in US stock costs continue when customers are still confronted with stagnant employment as well as falling home costs?

The printing of fiat cash is likely to have the ability to sustain a false financial recovery for a little time. But, ultimately, the price will probably be a rapid erosion of the worth of the US dollar - not just in actual terms, but also against nearly each and every other foreign currency. Regardless of feasible short-term corrections, gold and silver assets are likely best to protect investors from the challenges that lie down the track.

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