What the Boom in Silicon Valley Means for the Rest of the Economy

The epicenter of the latest manipulated Federal Reserve boom is Silicon Valley. New IPO's are streaming out of the area and employment is climbing.

California as a whole had an estimated 14.1 million non-farm payroll jobs last month, up by almost 157,000 from June 2010, for an annual increase of 1.1 percent.

The gains, however, are largely in tech-focused areas, especially San Jose and the broader San Francisco Bay Area. In the last month, net job gains in just five Bay Area counties totaled 44 percent of all gains in California employment.

As money seeps in to the economy the employment picture will climb across the country, just keep in mind that employment is a lagging indicator. Silicon Valley is just the start. They are getting the money first. There are likely other entry points as well, such as the midwest farming belt.

 If you want to look at a broader leading indicator, look as the stock market, which is turning strong again.

Ben Bernanke runs a very erratic monetary policy, but it looks like for the time being it is an accelerating monetary policy, which means continuing strength in Silicon Valley that will spread over the economy. I hasten to add this monetary policy is about accelerating money printing that will also lead to accelerating price inflation.