Monday, January 30, 2017
Is It Just A Coincidence That The Dow Has Hit 20,000 At The Same Time The National Debt Is Reaching $20 Trillion?
The Dow Jones Industrial Average provides us with some pretty strong evidence that our “stock market boom” has been fueled by debt. On Wednesday, the Dow crossed the 20,000 mark for the first time ever, and this comes at a time when the U.S. national debt is right on the verge of hitting 20 trillion dollars. Is this just a coincidence? As you will see, there has been a very close correlation between the national debt and the Dow Jones Industrial Average for a very long time.
For example, when Ronald Reagan took office in 1991, the U.S. national debt had just hit 994 billion dollars and the Dow was sitting at 951. And as you can see from this chart by Matterhorn.gold via David Stockman, roughly that same ratio has held true throughout subsequent presidential administrations…
During the Clinton years the Dow raced out ahead of the national debt, but an “adjustment” during the Bush years brought things back into line.
The cold hard truth is that we have been living way above our means for decades. Our “prosperity” has been fueled by the greatest debt binge in the history of the world, and we are greatly fooling ourselves if we think otherwise.
We would never have gotten to 20,000 on the Dow if Barack Obama and Congress had not gotten us into an extra 9.3 trillion dollars of debt over the past eight years.
Unfortunately, most people do not understand this, and the mainstream media is treating “Dow 20,000″ as if it is some sort of great historical achievement…
The average began tracking the most powerful corporate stocks in 1896, and has served as a broad measure of the market’s health through 22 presidents, 22 recessions, a Great Depression, at least two crashes and innumerable rallies, corrections, bull and bear markets. The blue chip reading finally cracked the 20,000 benchmark for the first time early Wednesday.During the current bull market, the second longest in history, the Dow has more than tripled since March 2009.
Since Donald Trump’s surprise election victory, the Dow has now climbed by approximately 2150 points.
And it took just 64 calendar days for the Dow to go from 19,000 to 20,000. That is an astounding pace, and financial markets around the rest of the planet are doing very well right now too. In fact, global stocks rose to a 19 month high on Wednesday.
So where do we go from here?
Well, if Donald Trump wants to see Dow 30,000 during his presidency, then history tells us that he needs to take us to 30 trillion dollars in debt.
Of course that would be absolute insanity even if it was somehow possible. Each additional dollar of debt destroys the future of our country just a little bit more, and at some point this colossal bubble is going to burst.
But you can’t tell most of the “financial experts” these things. Most of them simply believe that the “market always goes higher over time”…
The “market always goes higher over time,” Todd Morgan, chairman of Bel Air Investment Advisors. “The lesson here is that through wars, recessions, elections, impeachments, financial crises, and on and on, investing for the long term in high-quality stocks is the key to building wealth. … We are telling our clients that you can’t time the market. Think long term. Stay the course. We expect the market to see Dow 30,000 in my lifetime, and for my grandchildren to see Dow 50,000 in their lifetime.”
My hope is that the market will continue to go up. But nobody can deny that valuations are already at absurdly high levels, and the only way that this party can keep going is to continue to fuel it with more and more debt.
But for the moment, there is a tremendous amount of optimism out there, and most experts expect the Dow to continue to set new highs. In fact, CNBC says that whenever the Dow crosses a new threshold like this it usually means good things for investors…
CNBC looked at market data from the past 30 years and zeroed in on the times when the Dow has crossed levels like 2,000, 3,000, 4,000 … all the way up to the 19,000 level it hit in November. At those times, investors can typically expect traders to push it up even higher, according to data from Kensho. Not only does the Dow go up, but it outperforms the S&P 500 index along the way.
But as USA Today has explained, not all Americans are benefiting from this stock market rally…
The breakthrough came just four trading days into Trump’s presidency, a whirlwind in which the billionaire has reaffirmed his commitment to strengthen the U.S. economy and create more jobs and higher wages for workers. Still, nearly half of Americans have not benefited from the so-called “Trump Rally,” which has generated more than $2.2 trillion in paper gains for the Wilshire 5000 Total Stock Index since Election Day. The reason: only 52% of Americans polled by Gallup last April said they “have money invested in stocks” — the lowest stock ownership rate in the 19 years Gallup has tracked the data and down sharply from 65% in 2007 before the financial crisis.
Hopefully the good times will continue to roll for as long as possible.
But there is no possible way that they can keep going indefinitely.
For decades, our debt has been growing much faster than our GDP has. By definition, this is an unsustainable situation. At some point we will have accumulated so much debt that our financial system will no longer be able to hold up under the strain.
Many were convinced that we would reach that point before the U.S. national debt hit 20 trillion dollars, and yet here we are.
So how much higher can we go before the bubble bursts?
That is a very good question, and I don’t know if anyone has the right answer.
But for President Trump, this is going to present him with quite a dilemma.
Either he can keep the debt party going for as long as possible, or he can try to get us to take some tough financial medicine right now.
If an attempt is made to deal with our debt problems now, we will experience severe economic pain almost immediately.
But if the can keeps being kicked down the road, our long-term prognosis is just going to keep getting worse and worse.
And if we try to delay the inevitable indefinitely, at some point the laws of economics are going to make our hard choices for us.
So let us celebrate “Dow 20,000″, but let us also understand that it is far more likely that we will see “Dow 10,000″ again before we ever see “Dow 30,000″.
Credit to Economic Collapse
Friday, January 27, 2017
40 Men Control the Planet: It’s Trump and You vs. Everyone Else
President Trump has a nearly impossible job. The Mexican President, Nieto, spit in Trump’s face yesterday. Mexico says that they will refuse to negotiate with the Trump administration so long as they insist that Mexico will build the wall.
The simple thing to do seems to consist of canceling NAFTA. Mexico enjoys a $60 billion dollar trade surplus . They play home to millions of manufacturing jobs that used to go to Americans. Some economists will quietly say that this costs the United States almost a trillion dollars per year. This means lower wages, higher taxes and a declining standard of living for America.
To add insult to injury, the tens of millions of illegal immigrants that have flooded into America sent home $25 billion to Mexican private interests in 2015. This money is not taxed. The labor represented by this amount, which does not account for the under-the-table money that is sent to Mexico, is only a drop in the bucket. Conservatively, and this is a gross under-representation of the actual money that America is bleeding. The labor represented in this amount is not taxed, none of this goes to unemploymetn compensation, workmen’s compensation, social security and medicare. This greatly increases the burden on American citizens to cover these needs.
Mexico will never build the wall unless this movement of money is controlled and taxed. However, Trump is taking on an entire global economic empire. If you wondered why the media vilifies Trump at every turn, their six owners of the entire media profit greatly from all free trade agreements. This is what Trump is trying to undo. However, what most Americans don’t realize is the entire American economy is controlled by a few men who controls goverment and virutally every major industry in America.
Below is just a partial snapshot of how monolithic the corporate interests that controls our daily lives have beccome. Until Trump was elected, nothing ever happened without their approval. They own it all, they control it all. Take a look.
Six Corporations Control Almost Everything You Hear, See, Read and Ultimately Think-The 6 Masters of the Media Own All of the Food, Auto, Big Pharma, Managed Health Care, Clothing, etc.
14 Corporations Controls Almost Everything You Drive
Ten Corporations Controls Almost Everything You Eat
Please keep in mind that this is just the tip of the iceberg. The entire American economy is owned by fewer than 40 men, except for the dwindling number of small businesss that were devastated by the Obama administration.
These corporate giants dominate every aspect of your life and they own the media that tells what to think and how to behave. They control the voting process that stole about 20% of the popular vote. Yet, they still could not defeat Donald Trump and the American people.
Donald Trump can shut down NAFTA and cause Mexico to lose $60 billion a year in lost revenue, courtesy of Americans, and they can be taxed on the $25 billion that leaves the country, in the form of wire transfers from America to Mexico. However, it is critical to remember, this is a drop in the bucket.
These corporations benefit from bringing in cheap labor because they cannot export every job out of America. This is why we have massive illegal immigration. Your wages are lower and your working conditions are poor because the corporations have you where they want you. Ironically, they will NEVER allow immigrants to become citizens because they don’t want to pay employement costs of medicare, social security, unemployment compensation and workmen’s comp. The corporations are the biggest abuser of immigrants and yet, the media they control will never report this.
For Trump to be successful in negating free trade agreements, he needs our help. Congress must be made to feel the heat. Any Congressmen supporting the anti-Trump movement needs to be removed from office because they are costing you and your kids a decent wage and standard of living.
I have long advocated on shopping local, trading and bartering and removing your participation, as much as possible, from the corporate controlled economy. Eat out at Mel’s Diner and not Outback, for example. Go to Joe’s Hardware store and not Ace Hardware.
The American people are caught in a war. We face politicans who are bought and paid for by the very corporations that enslave us. We face a media that is relentless in their propaganda. And we have become conditioned to be apathetic and uninvolved.
Trump cannot do this alone.
Credit to Common Sense
Europe Proposes "Restrictions On Payments In Cash"
Having discontinued its production of EUR500 banknotes, it appears Europe is charging towards the utopian dream of a cashless society. Just days after Davos' elites discussed why the world needs to "get rid of currency," the European Commission has introduced a proposal enforcing "restrictions on payments in cash."
With Rogoff, Stiglitz, Summers et al. all calling for the end of cash - because only terrorists and drug-dealers need cash (nothing at all to do with totalitarian control over a nation's wealth) - we are not surprised that this proposal from the European Commission (sanctuary of statism) would appear...
The Commission published on 2 February 2016 a Communication to the Council and the Parliament on an Action Plan to further step up the fight against the financing of terrorism (COM (2016) 50). The Action Plan builds on existing EU rules to adapt to new threats and aims at updating EU policies in line with international standards. In the context of the Commission's action to extent the scope of the Regulation on the controls of cash entering or leaving the Community, reference is made to the appropriateness to explore the relevance of potential upper limits to cash payments.
The Action Plan states that "Payments in cash are widely used in the financing of terrorist activities… In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold."
Cash has the important feature of offering anonymity to transactions. Such anonymity may be desired for legitimate reason (e.g. protection of privacy). But, such anonymity can also be misused for money laundering and terrorist financing purposes. The possibility to conduct large cash payments facilitates money laundering and terrorist financing activities because of the difficulty to control cash payment transactions....Potential restrictions to cash payments would be a mean to fight criminal activities entailing large payment transactions in cash by organised criminal networks. Restricting large payments in cash, in addition to cash declarations and other AML obligations, would hamper the operation of terrorist networks, and other criminal activities, i.e. have a preventive effect. It would also facilitate further investigations to track financial transactions in the course of terrorist activities. Effective investigations are hindered as cash payments transactions are anonymous. Thus restrictions on cash payments would facilitate investigations. However, as cash transactions are moved to the financial system, it is essential that financial institutions have adequate controls and procedures in place that enable them to know the person with whom they are dealing. Adequate due diligence on new and existing customers is a key part of these controls in, line with the AMLD.Terrorists use cash to sustain their illegal activities, not only for illegal transactions (e.g. the acquisition of explosives) but also for payments which are in appearance legal (e.g. transactions for accommodation or transport). While a restriction on payments in cash would certainly be ignored for transactions that are in any case already illegal, the restriction could create a significant hindrance to the conduct of transactions that are ancillary to terrorist activities....Organised crime and terrorism financing rely on cash for payments for carrying out their illegal activities and benefitting from them. By restricting the possibilities to use cash, the proposal would contribute to disrupt the financing of terrorism, as the need to use non anonymous means of payment would either deter the activity or contribute to its easier detection and investigation. Any such proposal would also aim at harmonising restrictions across the Union, thus creating a level playing field for businesses and removing distortions of competition in the internal market. It would additionally foster the fight against money laundering, tax fraud and organised crime.
And then right at the end, they mention "fundamental rights"...
While being allowed to pay in cash does not constitute a fundamental right, the objective of the initiative, which is to prevent the anonymity that cash payments allow, might be viewed as an infringement of the right to privacy enshrined in Article 7 of the EU Charter of Fundamental Rights. However, as complemented by article 52 of the Charter, limitations may be made subject to the principle of proportionality if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others. The objectives of potential restrictions to cash payments could fit such description. It should also be observed that national restrictions to cash payments were never successfully challenged based on an infringement to fundamental rights.
Full Proposal below...
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Below are some recent thoughts on the matter from SovereignMan's Simon Black, who detailed previously that the war on cash is happening faster than we could have ever imagined, and predictably, is based on lies.
Credit to Zero Hedge
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