Business &Finance. - StumbleUpon. How the Stock Market and Economy Really Work - Kel Kelly. "A growing economy consists of prices falling, not rising. " The stock market does not work the way most people think. A commonly held belief — on Main Street as well as on Wall Street — is that a stock-market boom is the reflection of a progressing economy: as the economy improves, companies make more money, and their stock value rises in accordance with the increase in their intrinsic value. A major assumption underlying this belief is that consumer confidence and consequent consumer spending are drivers of economic growth. A stock-market bust, on the other hand, is held to result from a drop in consumer and business confidence and spending — due to inflation, rising oil prices, high interest rates, etc., or for no reason at all — that leads to declining business profits and rising unemployment.
The Fundamental Source of All Rising Prices For perspective, let's put stock prices aside for a moment and make sure first to understand how aggregate consumer prices rise. Forced Investing. Fortune 100 Best Companies (Infographic)
Management. Books. The Financial Crisis - A visual Guide to How the Economy Went Into Recession | MintLife Blog | Personal Finance News & Advice. Marketing. Business portal for executives created by a busy executive. The death of Steve Jobs: Steve Jobs and America's decline.