Following the release of the economic forecast by the Federal Open Market Committee (FOMC) yesterday, U.S. Fed Chairman Ben Bernanke’s taper talk sent stocks and commodities tumbling. Maybe tumbling isn’t the right word… Collapsing to near three-year lows, gold has dipped below $1,300 for the first time since the fall of 2010. Prior to the…
The Wealth Effect: Fact or Fiction?
Do consumers tend to spend more money when they have perceived notions of increased wealth? This developing theory has been defined by economists as “the wealth effect,” which is the simple notion that when consumers have more money, they spend more money. Economists, including Federal Reserve Chair Ben Bernanke, claim that higher stock and home…
