The government makes prices by buying certain assets but also by compelling you to buy them too. The whole point of QE is to make debt less valuable and to force you into equities. The point of asset purchases is to compel you to buy bonds even though you know it's not smart.The strategy goes far beyond the equity and bond markets. More and more governments are also forcing businesses to spend money on things that serve the public interest.Health care is one such issue. In the US now, 'Obamacare' is becoming so expensive to employers that they are starting to encourage workers to hold two part-time jobs in different firms so that neither employer is obliged to pay the full health care cost of a full-time employee.This has the added advantage of keeping unemployment higher for longer, thus permitting governments to continuously justify their ever increasing role in setting market prices.In the UK, pension funds are told by the regulators that they should put more capital into investments that are associated with public goals such as social housing and the building of schools or domestic infrastructure.
This is from Dr. Pippa Malmgren who is a policy expert, (Wikipedia.org) former Special Assistant to the President of the United States for Economic Policy on the National Economic Council and former member of the U.S. President's Working Group on Financial Markets and serves as adviser to many firms, at her website. A political insider talks about how 'gamed' or rigged the system is.
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