What is behind the global stock market rally?
By Andre Damon
September 29, 2012
Despite a string of disastrous economic figures, stock markets throughout the world are surging.
In the past year, the US Dow Jones Industrial Average and the British FTSE 250 have each risen by 20 percent, while the German DAX has shot up by 39 percent. The NASDAQ, consisting mainly of US-based technology companies, has already eclipsed its previous record, set in November 2007, while the Dow is within 600 points of its previous high.
The continued rise on stock exchanges comes as manufacturing activity in Europe, China and the United States slumps to its lowest level in three years. The European economy as a whole is contracting. In the latest raft of dire economic data, released Thursday, US durable goods orders recorded their sharpest fall since 2009. US economic growth for the second quarter was revised downward from an already anemic 1.7 percent to 1.3 percent.
How is one to explain the meteoric rise in stock values even as the global economy is sliding into a deeper slump?
The boom in stock prices is an expression of a global redistribution of wealth from the bottom to the top. The social conditions of the working class have been driven relentlessly downwards, while trillions of dollars have been turned over to the banks, mainly for the purpose of financial speculation.
This process is particularly evident in the United States, the center of world capitalism and the center of the global economic crisis.CONTINUE: [link to www.globalresearch.ca]