Thursday, September 6, 2018

Locations of Federal Reserve Money Spigots Pumping Money Into the Tech Sector

By Robert Wenzel

Whenever we are in the boom phase of a Federal Reserve created boom-bust cycle, you can be sure there is a powerful advance in capital goods sectors including the stock market and real estate.

One particularly powerful current boom capital goods subsector is the greater technology sector.

According to The Economist, beyond San Francisco, other cities are rising in importance in the tech sector.

The Kauffman Foundation, a non-profit group that tracks entrepreneurship, now ranks the Miami-
Fort Lauderdale area first for startup activity in America, based on the density of startups and new entrepreneurs. Peter Thiel is moving to Los Angeles, which has a vibrant tech scene. Phoenix and Pittsburgh have become hubs for autonomous vehicles; New York for media startups. There's also Boston and Seattle.

According to the chart above, this year, the greater Silicon Valley region at $32 billion dwarfs other cities that are the primary focus of tech venture capital investment. Silicon Valley is followed by New York by at $9 billion and Boston at $8 billion.

Miami-Fort Lauderdale is climbing rapidly but in absolute numbers, it is still well behind at $2 billion.

There is no question that a good portion of the money pumped into these areas are the result of Fed money spigots and when the Fed turns off the spigots these regions will see outsized reversals in their economies.

Robert Wenzel is Editor & Publisher of

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