Long sideways consolidations along with negative stories in the financial media are encouraged in order to draw in short sellers to squeeze in creating the next rally
A great number of poor and middle class have already noticed. The easiest way to make the most money in the shortest period of time is to use money and power to buy the government. After that just make sure that the policies paid for are those which make keep you rich and make you richer. rich. The most prolific money gusher of all times is that of controlling central bank’s policies so as to create an endless bull market in asset prices with money created out of thin air.
If you want to look at a bunch of charts and numbers and get a different explanation. find a Harvard trained economist. Any of them will do. Any of them can convince you that I am wrong and a nut case. Their credentials are impressive. There are a number of reasons I don’t rely on statistics and numbers. The biggest reason is that numbers are useless in the present moment. Understand the incentives that create the numbers and it is easy enough to know what is going on and with more precision. Go to a Harvard trained economist to get bedazzled. Read my articles to find out how the future is most likely to unfold. I am completely fantasy free. Their work is heavily dependent on assumptions that are completely untrue.
How do I know the U.S. economy is doomed? Saving the status quo over and over again guarantees an allocation of resources that gets more and more inefficient with every passing moment. Show me you say. I am sorry, there are no numbers that show human beings acting on incentives they possess. No precise numbers are necessary. No charts are needed. The behavior is what counts.
Any good economic numbers are occurring as a result of rising asset prices. The rich spend a lot of their newly acquired treasure. Take that away and the economy collapses.
Here is the problem with funding an economy by delivering to the powerful a continuous stream of unearned wealth and income. Any positive incentives the rich have with respect to economics are changed. There is no reason to invest in plant and equipment if government is sponsoring an increase in value for everything you own without you having to lift a finger. Corporations become lately.
Central banks have no political incentives to back off of their asset enhancement initiatives. They won’t unless there is a breakdown in civil order and somehow they are force to quit by political will. Traders in the financial markets are still using old dogma which was developed to be used in a free market setting. All these techniques do is generate losses and confound the people who use them.
With central banks in charge of elevating asset prices, using unearned money; any international event, war, threat of war or strange election result is used to draw in short sellers who are subsequently squeezed out of positions to create a surprise rally. There is absolutely nothing in the news currently which will cause a market crash.
If necessary, central banks will buy up enough stock to have controlling interest in the world’s largest corporations. If that plays out, the corporations acquired will become fat, lazy and falter. They will be replaced privately with new emerging corporations which produce and earn. In such a case, economies world wide will take many years to reset. Poverty will increase and goodwill that has not already disappeared from consumer markets will be gone completely.
One thing that will be hard to ignore will be when Gross Domestic Product turns negative and stays that way. That alone will not put an end to Federal Reserve tyranny. What it will do is cause ordinary citizens to override their instinctive propensity to trust government. That is a rare occurrence but given enough stress, individuals can and will opt for individual thought. Herd behavior is the path of least resistance. Given enough pain and stress folks will break away from herding behavior.
Regardless of the exact path followed, the United States economy is being held together by driving asset prices into the stratosphere. The collapse will come when asset prices fall. If there is a way to prevent that from happening, the investor class will do everything under the sun to keep it from happening. Just know that it will collapse.
Central banks are buying stocks with both hands. They won’t stop until they have to. Don’t count on international events to make a difference. Be it war, a change in government somewhere or anything else, central banks will just buy more. Remember, you can only trade with money you have earned. Central banks have unlimited sums, restricted not by God or anyone. They will use that money as they always have to take what little you have and divert to others with political power.
