THE COLLAPSE OF AMERICAN ECONOMY Part 2
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By Jim Quinn via The Burning Platform blog,
Submitted by Tyler Durden on 04/25/2016
Here only extracts
The dangerous divergence will then take a nasty turn.
The bottom half of the 1% will now be as angry as the 99%. Any attempt by the
establishment to further screw the nation by bailing themselves out will be met
with violent disapproval. The country is a powder keg. The upcoming election is
guaranteed to inflame opposing factions. A stock market crash in the next
six months would sow the seeds of financial, political, and social upheaval not
seen in this country since the 1960s. The established social order will be
swept away in a swirl of chaos and retribution. The dangerous divergence will
be resolved.
The chart below would appear to be in conflict with the
results of a recent Gallup poll regarding stock ownership by Americans. The
ratio of household equities to money market fund assets is near a record high,
60% above the 2007 high and 30% above the 1999 internet bubble high. The
chart would appear to prove irrational exuberance among the general populace.
SEE IMAGE AT: http://pbs.twimg.com/media/CfzC9OnUYAAjmxF.jpg
In reality, the lowest percentage of Americans
currently own stock over the last two decades. With the stock market
within spitting distance of all-time highs, only 52% of Americans own stock,
down from 65% in 2007. As the stock market has gone up, average Americans have
left the market. They realize it is a rigged game and they are nothing but
muppets to the Wall Street shysters.
The reason the ratio of household equities to money
market funds is so high is due to the Federal Reserve’s “Save a Wall Street
Banker” policies implemented over the last seven years. When you purposely
destroy the lives of senior citizens by reducing interest rates to “emergency”
levels of 0% and keep them there six years after the great recession is over,
it tends to reduce the amount of savings in money market funds. The divergence
created by the Fed’s insane policies is borne out by the data.
The average middle class American
has experienced two Fed induced financial collapses since 2000, with another
coming down the tracks in the very near future.
The average middle class American has rationally
exited the rigged stock market and refuse to be lured back in. Back in
2007, nearly three in four middle-class Americans, with annual household
incomes ranging from $30,000 to $74,999, said they invested money in the stock
market according to Gallup polling.
Today, only 50% report having stock investments. This
22% drop is more than double the changes seen in stock investing among higher
and lower income groups. Millions of middle class families have had to
liquidate stock holdings just to survive in this ongoing Main Street recession.
SEE TABLE AT: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/04/23/20160425_div.jpg
The data indicates an extremely dangerous coming scenario.
The middle class is already angry, disillusioned, suspicious of the
establishment, and impoverished by Fed induced inflation, Fed induced lack of
interest income and Obama induced Obamacare disaster.
The millennial generation also has a record low level of
stock ownership, as they carry massive levels of student loan debt, have less job
opportunities as Boomers can’t afford to leave the job market, pay skyrocketing
rents, and deal with a Fed induced over-priced housing market. They don’t trust the establishment, government, or Wall
Street. The angry older middle class are venting their anger by supporting
Trump for president. The pissed off younger generations are throwing a monkey
wrench into the coronation of Queen Hillary by SUPPORTING SANDERS IN DROVES.
The dangerous
divergence begins to come into focus. Every credible stock market valuation
used over the last 100 years is now at extreme levels only seen in 1929, 2000,
and 2007. .. As stock prices push towards all time highs, corporate profits
continue to plunge. A 40% to 60% decline in stocks is essentially baked into
the cake.
..
SEE IMAGE AT: http://images.hedgeye.com/media_assets/0076/5775/Cliff_Asness_Guide_to_CAPE_implied_future_returns_normal.png
Millions of upper middle class professionals have bought
into the establishment propaganda. They actually believe the Federal
Reserve is infallible and can keep stock prices elevated for eternity. Despite
conclusive evidence the Fed failed in 2000/2001 and again in 2008/2009, the
willfully ignorant stock market participants are putting their faith in highly
educated academics whose insane monetary machinations have led to a global
recession and global debt levels imperiling the worldwide global economy.
The last remaining threads keeping the country from
imploding have been the rising stock market and the home price recovery.
Both recoveries have been engineered through Fed easy money, Wall Street fraud,
and mainstream media propaganda. Neither is based on a solid foundation of free
market true demand. When the bottom gives out, it will drastically impact the
upper middle class and people who pass for rich in this day and age. When the tide goes out for the third time
in the last sixteen years, millions will be revealed to be swimming naked and
in debt up to their eyeballs.
The dangerous divergence will then take a nasty turn.
The bottom half of the 1% will now be as angry as the 99%. Any attempt by the
establishment to further screw the nation by bailing themselves out will be met
with violent disapproval. The country is a powder keg. The upcoming election is
guaranteed to inflame opposing factions. A stock market crash in the next
six months would sow the seeds of financial, political, and social upheaval not
seen in this country since the 1960s. The established social order will be
swept away in a swirl of chaos and retribution. The dangerous divergence will
be resolved.
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