Thanks Janet Yellen: Google overtakes Apple as world’s most valuable company

Since the 2008 economic collapse, the Federal Reserve has printed so much money that it seeped into Wall Street. The New York Stock Exchange has relied so heavily on easy money from the United States central bank for many years that it couldn’t flourish without it. This is a part of the reason why we’re seeing such volatility because the Fed ended QE late last year.

With all of that printed money, we have seen skyrocketing price inflation in stocks, which has thus created an immense bubble. Much like everything else the Fed and Washington touch, prices go up. Yes, everyone is blaming China for crumbling stock values, but much of the 2016 declines can be attributed to the Fed’s slowdown of money printing.

Over the last several years, the U.S. stock market’s various segments have entered into a bubble, particularly tech, biotech and social media (SEE: Federal Reserve manipulated boom creating another dot-com bubble). It’s the dot-com bubble over again, or at least Dot-Com 2.0!

For any proof of this take a gander at the latest news: Google parent Alphabet Inc. is on the cusp of overtaking Apple as the world’s most valuable publicly-traded company.  With Alphabet shares soaring as high as 10 percent during Monday’s extended trading session, the company is on track to exceed Apple’s market capitalization of $534.7 billion. As Apple’s investors are starting to worry over its smartphone business, Alphabet is starting to gain their confidence.

It’s believed that the search engine titan will surpass the $550 billion Tuesday.

The first chart is from the Google parent:

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The second chart is from Apple:

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This isn’t the first time that such a feat has transpired since the financial crisis. In 2011, Apple took over Exxon Mobil Corp. as the world’s most valuable company. Indeed, the headlines have been reporting incessantly of record high stock valuations. But without assistance from the central bank – or a spiked punch bowl – we’re beginning to see the end of the booming stock market.

Tech is not in a bubble? Here is what Bloomberg News writes:

“While Apple generates more than triple the revenue and profit of Google, investors focus more on future prospects than past performance. It’s a market truism that’s particularly acute in the technology industry, where new breakthroughs can rapidly undercut previously reliable business models. Apple and Alphabet’s ascendance to half-trillion-dollar-plus valuations illustrates the premium investors put on U.S. technology companies. Five of the nine most valuable companies in the world are from the industry — Alphabet, Apple, Microsoft Corp., Facebook Inc. and Amazon.com Inc.”

There is no doubt that these companies would be billion-dollar successes because they satisfy the consumer. As long as the consumer is happy – and these companies ensure that – then they’d of course earn that billion dollars. But would their stocks grow 820 percent in just a five-year timespan? Not without a little help from Bernanke, Yellen and Co.

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The printing presses were on overtime throughout the Great Recession, and those at the top, those with great connections benefited greatly. The crumbs of the freshly created money are now beginning to seep into the rest of the economy, which will then lead to enormous price inflation.

As economist Murray Rothbard stated:

“Particular sufferers will be those depending on fixed-money contracts – contracts made in the days before the inflationary rise in prices. Life insurance beneficiaries and annuitants, retired persons living off pensions, landlords with long-term leases, bondholders and other creditors, those holding cash, all will bear the brunt of the inflation. They will be the ones who are ‘taxed.'”

But as long as more of the below happens then who cares about the rest of us?

nasdaq

When the free, easy money comes to a grinding halt, so does the ascension of stocks.

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