5 Common Misconceptions about the US Economy
3. The Stock Market
Federal Reserve policies often result in inflation. By effecting the supply of money at any given time they are also toying with the value of the dollars in your pocket. Over time inflation causes prices and returns to inflate as well. The results can seriously effect stock prices. While the stock market is still a pretty good gauge of economic health and activity, adjusting for inflation allows you to see the genuine the growth aside from the inflated, artificial growth. Turns out most of the economic growth the US experienced in the 1990’s was inflation.
