Mar 2, 2015
Stock markets in the imperialist countries have hit record highs. On February 17th, the Standard & Poor index of the 500 biggest U.S. stocks hit its highest level ever of 2100 points. The next day, the Japanese stock market index set a new record. And the day after, it was the turn of big French companies. These indexes show the price of stocks and the growing wealth of stock holders.
The reason for these soaring stock prices is the trillions of dollars, euros and yen that the different central banks have given to the markets. A former banker, Jean-Michel Naulot, who is often cited in the press, said, “Taking into account the low level of investments and anemic demand of households, all this cash will once again feed financial bubbles.”
In January the head of the European Central Bank announced a program to pour cash into the financial markets by buying up 67 billion dollars of debt certificates each month until September 2016, adding up to 1.2 trillion dollars. The Federal Reserve in this country has been doing the same thing for some time.
Far from investing in new production, the speculators, that is the financiers, didn’t even wait for the first billions to come in to compete for the stock of existing companies. The flood of new buyers for the moment made stock market prices soar. The rise fuels itself. Speculators buy today to sell at a higher price tomorrow, and earn money as long as the price rise continues.
But this explosion doesn’t rest on anything real: nothing additional is produced, made or even sold. The billions fabricated by the banks will only make the next financial crisis more catastrophic.