Feel better about your 401K? Don’t. The recent advance in equity prices has been bought. How? A massive reduction in the federal government’s (yours) balance sheet via record low interest rates (0%) and massive issuance of government debt.

The proof? Just look at the correlation between the value of the dollar (decreasing) and the corresponding increase in equity prices:

In other words: The market has risen on a nominal basis, on a real basis: Not so much…