Rising Markets, Bad Jobs Report Conflict Economy Analysis The American economy has a split personality and that spells trouble for everyone–but most particularly the bureaucratic elitists and those dependent on that system.
In the Red corner there is the soaring stock market, in the Blue corner is the continual employment woes. The market is fantasy, the unemployment problem reality but the two must exist together to make the economic picture complete. Unfortunately the white canvas is where they meet.
The market is a rising bubble fueled entirely by the Federal Reserve’s infusion of newly minted money. The unemployment woes linger because the printed fiat is not getting to the Main Street that it specifically and vociferously targeted when the printing began.
How much money has been created? The answer is shocking. A quick check of the Fed balance sheet at the end of 2007 shows less than $1 trillion was in circulation or printed. Checking today gives a total of just under $6 trillion printed. Without a swift abatement of the printing press run America will be over the $6T mark by the end of the month. A stoppage is not going to happen. But the 500% rise has had little impact on Main Street where most of us live and has only supported the financial sector’s balance sheets.
If Ben Bernanke began the printing press, new Fed Chair Janet Yellen will only grease the wheels more than BS ever imagined. Dubbed “Miss Money Printer” by colleagues who knew her before her Chair was confirmed by the Senate, Yellen is completely wedded to the idea that printing money is never bad.
But this printing press run, across every central bank and not only the U.S. Federal Reserve, more closely resembles Peter Pan’s Never-Never Land than it does economic reality. Reality will catch up with central bankers’ irresponsibility and when it does you’d be better off with your money in your pocket and not on the table–anywhere.
The anywhere means the stock markets-foreign and domestic, bonds or even the bank. If it is not in your hand when the crunch hits, you can count it gone. The trick is in knowing when that fateful deal will occur, staying in the game until that hand comes due to extract the last possible penny.
If the 2002 bubble in the tech market was a warning and the bursting 2007 real estate bubble was the red flag, the next bubble pop is going to be in stocks where the profits are not based on the profit or earnings statements of old but on the grease coming from the central bank’s penchant to create currency from thin air. In short, the house has been playing with your money all along in this recovery because it thinks it is theirs.
The current market run has the Fed bubble stretched to the breaking point. The lighthouse beacon warning the good ship U.S.A. Economy to steer clear of the reef was the December jobs report.
Most dealing the game expect the anemic 74,000 non-farm jobs gain to be revised upwards before the figure is finalized, after all that is the end-game the bureaucrats have been playing for a long time.
But what if this was it? What if December comes in and stabilizes below a 100,000 level? How can the Fed explain its six-year stimulus balance sheet missed the target so badly? How will it explain why it let the press continue to run without the desired results?
Unless that was the game all along, merely buying time until they could figure out a real answer or until a bigger crisis came along.
By Mike McCune –
The top U.S. banks have increased their stranglehold on U.S. wealth over the past seven years, aided and abetted by government collusion. All those “Help the Consumer” programs finding life, all the miles of red tape and restrictions verbally assuring Americans the Consumer was the prime priority actually made the Consumer more subservient to the Big Banker, not lessened the banks’ power. Otherwise the December jobs figures would be reversed.
More than 54 months after the recovery began the government is debating whether or not to again increase unemployment compensation’s period. That’s no recovery but a magician’s distraction ploy.
We’ve degenerated into a Haitian-like state where the masses stand and beg others for aid rather than go out and start the repairs themselves. Resources are always available to those who choose to get them for themselves and not beg from others. America used to be the land of risk-takers. Government oversight has effectively stolen the rewards for risk taking through an incomprehensible tax system designed to “redistribute the wealth” and “equalize results.”
So we have more and more families standing in the unearned paycheck line thinking it is their due. In a way it is because, while working, they supported the corrupt system. But now there are more takers than workers. The system has a large foundational crack in its ever-rising national debt.
This is the reality that is going to come and smack the stock market bubble. Survival won’t depend on your level of education or experience or talent. It will depend completely on how well you can withstand that initial shock wave and how well you are able to adapt in the aftermath. Most of us won’t be able to quickly enough. Government is the most unprepared of all.
For a government who measures everything by the fiat standard they’ve created, the reality blow will probably be lethal. Without the theft-of-fiat threat to fall back on, the entire state system implodes upon itself.
Our economy has a split personality today and is prepping for a family fight. The majority of us are bystanders to the wreck. Those that have anted chips or raised think the game has a few more hands to go.
Don’t bet on it. Family dysfunction is endemic and one never knows which day it will happen to theirs.
“I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man.”–Thomas Jefferson
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