“The U.S. economy – thanks to the Fed – has been operating a $1 trillion share buyback program nearly every year since late 2008, buying Treasuries but watching much of that money flow straight into risk assets and common stocks instead of productive plant and equipment. My goodness! If X can’t grow revenues any more, if X company’s stock has only gone up because of expense cutting and stock buybacks, what does that say about the U.S. or many other global economies? Has our prosperity been based on money printing, credit expansion and cost cutting, instead of honest-to-goodness investment in the real economy?”
Bill Gross does a great job of explaining in detail how much we have replaced basic common sense investment with financial alchemy. Essentially the US has been systematically damaging real savings, the source for real investment, in favor of the appearance of prosperity through financial engineering with clear consequences for genuine results.