Issue link: http://resourceworld.uberflip.com/i/638235
f e b r u a r y / m a r c h 2 0 1 6 www.resourceworld.com 9 American workforce, also called the middle class. This obsessive com- pulsive behaviour in making the North American economy ever more efficient resulting in ever higher margins demanded by Wall Street not only eliminates jobs but also pulverizes any attempt for a run in the inflation rate. After all, one of the main criteria for inflation is a wage raise. Good luck trying to get a raise while you are competing on a wage basis with a worker out of India or efficiency basis with a soft- ware or robot. You do not stand a chance. So what is the macro result of this? For starters, when a job seeker can't find full time jobs, they hold several lower paying part time jobs on a regular basis termed 'under- employment' and seemingly on a steady trend according to monthly job stats coming out of the US. Incidentally, the US had virtu- ally no inflation in the month of November; the reading was 0.5% which can only mean, among other reasons, that we are currently going through a wage freeze, which can't, by any stretch of the imagination, be a good indication for the economy. Lower wages translates into lower consumption, which translates into lower economic activity, which at the same time feeds into the under- employment rate all over again. The asset bubble trickle-down economy driven by the Fed's zero rate policy was supposed to counter all of this. The Fed had no option but to bet the farm on the theory that what's economically good for the 1% will eventually trickle down into jobs and new opportunities for the 99%. Yet here we are with a steady labor market slack and vir- tually no inflation, 82 months in a stock bull market. The Fed and The economy This is no longer your father's or grandfather's economy. While we probably are witnessing the incom- ing market corrections because of the Fed's misguided policies, excluding for the resource sec- tor where it has been done to the extreme, the S&P 500 at its present valuation, really has not yet priced in the new normal. The S&P 500 is one of the most commonly followed equity indices, and many consider it as the best representation of the US stock market. The index is based on the market capitalizations of the 500 largest companies having com- mon stock listed on the NYSE or NASDAQ, weighted by company size. What that means is that big-