The Ignorant Investor

The Fed is keeping rates near zero and continues to say that rates will stay that low for “an extended period.” Stocks rallied slightly during the afternoon. The way it was explained to me is that when the fed keeps rates low, there's no money to be made in bonds and bank accounts. The only place to go for returns is equities, real estate, or alternative investments like gold, commodities, or the like. It also discourages saving money, because money in a bank account with low interest is constantly shrinking in value as inflation eats away at real return.

After seeing consumer confidence and consumer spending improve with rising stock prices, I've decided that the Fed and the government will continue to try to support the market and push up asset prices to encourage the consumer to relax and stop worrying about saving money.