I saw an article this week that opined that the economy would be recovering meaningfully because the stock market is doing well and that means that it is “telling us” that the economy is improving. It was basically trying to explain why the “market” is rising when the economy is tumbling. The idea is that the “market” leads the economy rather than the other way around.
In a real economy where people were actually producing goods and saving this would likely be a good explanation because as people earn and save it sets the economy up for a nice recovery.
The economy that we are currently experiencing is NOTHING like a fully functioning economy. As I wrote last week 34% of American’s incomes were from government transfer payments- not earned income!
What we are seeing now is “money” being conjured up from nowhere, assets being purchased and an illusion that savings are being deployed into assets when, in reality, new debt is being created and asset prices are rising on the back of ever-increasing debt. If the debt creation even slows down it could cause a major pullback in stock, bond and real estate prices across the board.
We are actually at a point where, if many don’t keep getting government handouts, we will have a true human tragedy on our hands. 40 million are at risk of eviction from their homes. Many are admitting to being food insecure and many of the small businesses decimated by the lockdowns are not ever coming back- nor the jobs that were lost in those same businesses. This is not a recipe for a recovery of ANY kind.
Let’s not forget that small businesses provide more jobs than large firms, provide innovation to keep the economy moving forward and provide competition for labor to increase wages. According to Gerald Celente of the Trends Journal, 20% of all businesses operating in January of 2020 have stopped doing business entirely. He opines that most are closed permanently. In addition, Alignable (business network website) surveyed 6325 small businesses and reported that 40% are at risk of failure by year-end.
We are at a point where it will take a miracle to avoid a fate worse than those that went through the 1930s experienced. Just think about the lack of food, shelter, medicine, etc. and the state of morality in our country now versus then. As my friend Bob Unger said years ago- “during the great depression a person wouldn’t steal an apple if they were starving because they had morals. Today, these animals will kill you for your shoes”.
As a matter of fact, the worse the economy does and the worse the economic numbers get the higher stock prices seem to rise because of the expectation of more and more “printing” and stimulus.
The likelihood of a strong recovery in the near future is, in my opinion, near ZERO. This would be made even more likely if Joe Biden were to win the upcoming election and institute his planned tax increases that would be the final death blow for many small businesses- assuming they can make it THAT far.
It is highly likely, in my opinion, that if Biden were to win the “markets” would likely move higher in the expectation that the “printing and buying” would go even more ballistic than what we are currently seeing. Of course, that does NOTHING for the economy- it just artificially inflates asset prices. It is important to remember that this stimulus gives those “assets” a sugar high but they are temporary. We can use Japan as a guide. They are decades ahead of us in their monetary madness.
It appears that all that seems to matter at this time is how much is the Fed (and most other central banks) are conjuring up and how much governments are spending.
What many people can’t comprehend is that this type of manipulation has to end. It either ends by a cessation of stimulus and a likely immediate collapse or they keep “printing and buying” until the currency is so abundant that nobody wants to accept it as payment.
Of course, those in charge will do all they can to keep as many in the dark as possible. While many are focused on the media companies burying the Hunter Biden story many are unaware of how many other things get buried- like the criminal charges against many major banks for manipulating almost all asset prices for their own gain. Like the naked-shorting going on to suppress metals prices so the truth will not be exposed as to how badly the dollar is being depreciated- along with all of the other currencies.
While we focus on the same subjects day after day there is VERY little reporting about the worldwide destruction of crops, the military buildups that are taking place globally and the likelihood of a new Bretton Woods-type agreement (the Bretton Woods agreement made the US dollar the world’s reserve currency and has been the reason for our being able to live above our means for a long time). These type of stories are much more likely to have an impact on our future than what Trump said or Biden did or who is accused of some abnormal behavior.
For those who watch election 2020 24 hours a day 7 days a week because you want to be “informed” think about this:
- Africa and the Middle East have seen devastating locust storms that decimated this year’s harvest.
- Much of the corn crop in Iowa was destroyed by an unusual summer storm. I never heard of a Derecho before but it packed 100+ mile per hour winds and led to 57 million bushels (estimated) of corn being destroyed as well as over $300 million in damage to storage facilities which may result in a lower harvest and not enough storage for what is actually harvested.
- About a year ago Joseph Wu- Taiwan’s Foreign Minister said: If for whatever reason China’s economy crashed, the communist government would invade Taiwan to divert attention from domestic economic woes. Just today on Zerohedge there was an article “China crackdown on property developer debt sparks fear about systemic crisis. In another article it is mentioned that China is deploying hypersonic missiles in strategic locations near Taiwan.
- There are many proxy wars taking place all around the globe- similar to what took place in the years leading up to WW2. So far I am aware of China/India Border, China/Taiwan, China/Hong Kong, China/USA (Taiwan- Shipping Lanes), Russia/Turkey (Armenia-Azerbaijan) , Russia/USA (Syria), USA/Venezuela and many, many more with the potential for escalation.
- Supply chains are breaking down already and some goods are already getting harder to source. This may only be the beginning since “printing” money creates NOTHING and allows those who have produced NOTHING to continue to consume. Eventually, the consumable goods are used up and prices rise- most likely uncontrollably. At that point hard assets and real goods are what will likely be prized most by everyone.
- Central banks are all-in on creating their own digital currency. This would likely be a disaster for any personal privacy that is left. This will allow taxation on EVERY transaction, a record of every transaction and the likely ability to turn off your purchasing power if you in any way step out of line- like in China right now. Of course, if the many don’t have a clue until it’s here it is MUCH easier to have a crisis and have people begging for a solution. Voila! We all become slaves of the state and most will be begging for it.
- In a story that has been somewhat reported many large cities are preparing for major riots around the 2020 election. It appears to me that neither side will likely go quietly and I am expecting some form of chaos- as many others are.
There are many stories that will likely impact us far more than the stories that the MSM put out. This is by design. Google Project Mockingbird and see what you discover. Under Obama the newsrooms were taken over and the government decided the stories that were “important”. What you will notice is the same stories appear on each channel but are just presented in different ways. This is to keep us divided in my opinion. This keeps us from recognizing what is really happening.
Keep in mind that paper assets- mainly stocks hate indecision and chaos. On the other hand, gold has been an asset that humanity has flocked to in times of trouble for over 5000 years.
Could this be why central banks, major banks, billionaires and those who are thinking logically are buying gold and silver in record amounts? Is this why even Warren Buffett is lightening up on stocks- along with corporate insiders- and buying gold stocks now?
My guess is that the central banks- their owners- the major banks and their friends (billionaires) know something big is coming and they have been getting ready for the past 3 years at least. Are you ready?
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