The Beginning Of The End
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7 Charts That Prove That The Stock Market Has Become Completely Divorced From Reality

7The mainstream media would have us believe that the U.S. economy must be in great shape since the stock market has been setting new all-time record highs this month.  But is that really true?  Yes, surging stock prices have enabled sales of beach homes in the Hamptons to hit a brand new record high.  However, the reality is that stock prices have not risen dramatically in recent years because corporations are doing so much better than before.  In fact, the growth in stock prices has been far, far greater than the growth of corporate revenues.  The only reason that stock prices have been climbing so much is because the Federal Reserve has been flooding the financial system with hundreds of billions of dollars that it has created out of thin air.  The Fed has created an artificial stock market bubble that is completely and totally divorced from economic reality.

Meanwhile, everything is not so fine for the rest of the U.S. economy.  Economic growth projections have been steadily declining over the past two years, and the growth rate of personal income in the United States has been on a huge downward trend since 2008.  The U.S. economy actually lost 240,000 full-time jobs last month, and the middle class continues to shrink.

So welcome to the "new normal" where most Americans struggle at least part of the time.  According to one recent survey, "four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives".  Things are tough out there, and they are steadily getting tougher.

Yes, the boys and girls up on Wall Street are doing great (for the moment), but most of the rest of the country is really struggling.  We have never even come close to recovering from the last major economic crisis, and now another one is rapidly approaching.

The other day, Chartist Friend from Pittsburgh sent me an email and told me that he had some charts that he wanted to share with me and asked if I wanted to see them.  I said sure, send them over right away.  These charts show very clearly that the stock market has become completely divorced from reality.

In a normal market, stock prices would only rise dramatically if the overall economy was healthy and growing.  Unfortunately, our economy is far from healthy and has been declining for a very long time.  If the financial markets were not being pumped up by so much money printing and so much debt, there is no way that stock prices would be this high.

If we truly did have a free market financial system, stock prices should be a reflection of the overall economy.  Instead, we have a very sick economy and financial markets that have been very highly manipulated.

For example, just check out the first chart that I have posted below.  If the economy was actually getting better, the percentage of working age Americans with a job should be increasing.  Sadly, that is not happening...

CFPGH-DJIA-04

This next chart shows how the average duration of unemployment has absolutely skyrocketed in recent years.  Yes, the duration of unemployment has improved slightly in recent months, but we are still very far from where we used to be.  Meanwhile, the stock market has been soaring to new all-time record highs...

CFPGH-DJIA-11

Traditionally, there has been a high degree of correlation between stock prices and real disposable personal income.  From the chart below, you can see that this relationship held up quite well through the end of the last recession, and then it started breaking down.  This is especially true at the very end of the chart.  Real Disposable income has started to decline sharply but stock prices just continue to soar...

CFPGH-DJIA-19

When an economy is healthy, money tends to circulate through that economy at a healthy pace.  That is why the chart below is so alarming.  The velocity of money is the lowest that it has been in modern times, and this indicates that economic activity should be slowing down.  But the Federal Reserve has enabled the bankers to thrive by pumping massive amounts of money into the financial system...

CFPGH-DJIA-05

When an economy goes into recession, freight shipments tend to go down.  In the chart below, you can see that this happened during the past two recessions.  Unfortunately, we have never even come close to returning to the level that we were at before the last recession, and yet the stock market has been able to soar to unprecedented heights...

CFPGH-DJIA-17

When an economy is growing and people are able to get good jobs, they tend to go out and buy new homes.  Yes, we have seen a bit of an increase in the number of new homes sold recently, but we are still a vast distance away from the level we were at before the last recession.  And now mortgage rates are starting to rise steadily, and this is likely going to cause the number of new homes sold to start going back down.  The chart below clearly shows us that the real estate market is far from healthy at this point...

CFPGH-DJIA-09

For most middle class Americans, their homes are their primary financial assets.  So the fact that home prices have declined so much is absolutely devastating for many families.  But stocks are primarily held by the top 5 percent of all Americans, and as the chart below shows, they have benefited greatly from the antics of the Federal Reserve in recent years...

CFPGH-DJIA-08

There is no way in the world that the stock market should be this high.  The economic fundamentals simply do not justify it.  As a society, we consume far more than we produce, our debt is growing at an exponential pace, our economic infrastructure is being absolutely gutted and our financial system is a giant Ponzi scheme that could collapse at any time.

And no market can stay divorced from reality forever.  At some point this bubble is going to burst, and when financial bubbles burst they tend to do so very rapidly.

As Marc Faber recently said, "one day, this financial bubble will have to adjust on the downside."

When it does "adjust", we are likely going to see a financial panic even worse than we witnessed back in 2008.  Credit will freeze up, economic activity will grind to a standstill and millions of Americans will lose their jobs.

Don't assume that the bubble of false prosperity that we are enjoying right now will last forever.

It won't.

Use the time that you have right now to prepare for what is ahead.

A great storm is rapidly approaching, and I don't see any way that it is going to be averted.

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  • Rodster

    Detroit !

  • frankensteingovernment

    Bullish!

  • stew

    Matt Damon!

  • markthetruth

    80 percent of U.S. adults face near-poverty, unemployment, survey finds

    But the PBA Unions want overtime Money in the town Budgets Where there is no crime . They are robbing the towns blind…

    the end…

    • Sack man

      Did you fail the psych eval of a police exam? The end (not).

      • markthetruth

        No, it’s just that it becoming a ponzi scheme in itself the towns have so many pensions to pay. Because they can retu

    • El Pollo de Oro

      Markthetruth: How divorced are some city unions from reality? I’ll give you an example. I know a guy who works for the NYC parks & recreation department who makes six figures, gets double-time if he works on a weekend, takes three-week vacations in Europe at the taxpayers’ expense, and is planning to retire at 62 or 63 with a very generous pension. And this guy isn’t in a managerial-type position either. He barely made it through high school. Yet he loves to talk about how people in the private sector are lazy and unmotivated compared to him.

      El fin……

      • markthetruth

        The bigger issues are the inner well off suburbs where there is minimal danger for them, that they are making more then the leaders of the state while some Cops of the cities bad area’s are making half and actually get shot at. the pay is opposite of what it should be.

        the end…

      • GusFarmer

        Hi,all,
        While there are indeed some union-related excesses, the real thievery of municipal funds is caused by the fact private banks charge so much interest any public project (roads, schools, etc) costs about 30% more than it’s actual value to build by the time the bonds are paid off.

  • K

    So lets’ see. The stock market has lost contact with reality. The general population has mostly lost contact with reality. And the Government has lost all contact with reality. Michael your a lawyer. Could the very few of us, still in contact with reality, qualify as a recognized minority? Or perhaps as an endangered species?

    • MichaelfromTheEconomicCollapse

      I definitely think that we qualify as an endangered species. :)

      Michael

      • markthetruth

        And who’s going to help us from becoming Extinct , we only can do so much before they destroy us.

        the end…

      • GSOB

        We are aliens

        • Smegley

          At least we are legal ones ;-)

      • http://americandictators.blogspot.com/ WarriorClass III

        “It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people’s minds.” Sam Adams

    • Hambone

      It’s really amazing. People go on and live their lives as though this gravy train will last forever, ignoring the world around them changing.

      • Avellan

        I struggle with that thought as well, “how can people be ok with what is going on?” But then I realize that it may be because the majority of people don’t realize what is going on. How much of the United States population do you think are on blogs like this one? The vast majority of them are informed via the media news corporations who I believe are aligned with the interests of those who benefit greatly from the economic game.

        Or maybe a good number are informed but feel powerless to do something about it. Honestly speaking, I do as well.

        • Reynaldo Neggle

          Most people tend to watch whatever news props up their belief system that nothing could possibly go wrong for real. Somehow, no matter how bad it gets, the govt will get us out of it in the end. And so they just shrug off any bad news as being irrelevant. And I have a strong suspicion that most people are naive in not understanding the kind of criminal element that hijacked our Republic.

          • dorn76

            CLue in, buddy. The hijacking was done long before any current govt thugs were in office.

  • MichaelfromTheEconomicCollapse

    Speaking of economic collapse, one of the readers recently produced a music video about economic collapse and posted it on YouTube…

    https://www.youtube.com/watch?feature=player_embedded&v=cpiz2-0eDy0

    Michael

    • K

      Yes I saw it. Excellent job.

      • GSOB

        I thought it was too long.

    • GSOB

      The subject content was a bit regurgitating, though – accurate.

      Thanks

  • scott witherell

    The plunge protection team has been doing a great job of keeping the stock market going…. for now.

  • markthetruth

    I believe where are going to be overcome with a Advertising Blitz claiming their entertaining us but in reality interfering with our train of thoughts in all atmospheres and unable to escape it. We will be Hypnotized at will.

    the end…

  • Patrick

    This bubble can pop anytime with all the racism going on in the USA right now. Fighting and burning of our cities are going to happen its very sad please prepare so you can help our people during this hard time coming up.

  • saintmatty

    money is tight. Pray and seek God.

  • Paladin

    I believe Ayn Rand is credited with saying something to the effect that you can ignore reality, but you can not ignore the consquences of ignoring reality.

    • GSOB

      Good!

      I like this from Ayn Rand:

      America’s abundance was not created by public sacrifices to the common good, but by the productive genius of free men who pursued their own personal interests
      and the making of their own private fortunes. – Ayn Rand

      • Ralfine

        Oh come on.

        America’s abundance, like everything else, was created by god, innit?

        And if it is god’s will that America be destroyed so be it. Why fight it?

        • GSOB

          Are you bored?

      • GusFarmer

        Unfortunately for her, most of those “private fortunes” exist because of massive public infrastructure investment (or,in some cases, b/c they blatantly stole public resources). Rand was, and still is, a fool.

  • JailBanksters

    To put is simply

    The Expansion of the Money Supply, is far exceeding the negative growth the Economy. No good can come of this. Can it really be called a Bubble if one is going Negative and one is going Positive. I think it really needs a new term to describe what is happening here.

  • ceryl

    The problem is , majority of people are unable to think of what they want to do with there lives.
    So, such population is very easy for TYRANT THINKERS to exploit and use them just like other animal species.
    RELIGION played a role in the formation of the civilized society, but, the priest community soon realized that human brain can be easily manipulated.
    So, this brain manipulation experiment of majority of population by priests IS THE SOLE REASON WHY ENTIRE WESTERN NATIONS ARE IN DEEP DEEP TROUBLE.
    The priest community has became so powerful over the centuries that it has absolute monopoly over all kind of knowledge,knowledge,knowledge,knowledge,…………………….,knowledge.
    Since, KNOWLEDGE IS POWER , priest community always made sure that rest of the non-priest community be given MISINFORMATION in the name of knowledge.
    So, folks it is this LACK OF KNOWLEDGE according to me is the single most reason why a handful of humans are successful in FLEECING US MERCILESSLY.FOR CENTURIES.
    we are MISINFORMED like none on the face of planet.
    LESBIANISM.GAYISM,KINSEYISM,SUPRESSION OF FORBIDDEN PLEASURE NO LONGER A TABOO,MASTURBATION IS HEALTHY and ENCOURAGED,REALITY SHOWS minus any reality,PLAYBOY,CASINOS,STANDARDIZED TESTS IN GOVERNMENT SCHOOLS, and the list goes on and on …………………………………………………………………………………..
    PRIESTS LIED FOR CENTURIES BUT ALL OF US FAIL TO NOTICE THE DARK SIDE OF HUMANITY ie devilish side OF HUMAN BEINGS.
    And you may be wondering why PRIESTS ARE ABLE TO DO IT SO WELL?
    i mean controlling millions of us?
    ie because , due to religion, human beings are basically divided in to 2 groups.
    THINKING HUMAN BEINGS COMPRISING PRIEST COMMUNITY and the other group consist of the rest us HYPNOTIZED in the name of GOD.
    so, right from the beginning, priest community is VERY UNITED as against the rest of us.
    we may be large in number but numbers only matter when there is a unity among them.
    So, all rest of us were ENSLAVED for centuries and upto this day by DIVIDE AND RULE POLICY.
    all in all, since the invention of BANKING, the severity of our enslavement increased drastically.
    ANY KIND OF CURRENCY BE IT GOLD BACKED,SILVER BACKED or WHATEVER IF DISTRIBUTED UNFAIRLY ALWAYS RESULT IN TYRANNY and ENSLAVEMENT.
    so the most important lesson to learn is STRIVE FOR KNOWLEDGE as Socrates PINPOINTED .
    strive to learn the truth………because only true knowledge is truly liberating.
    BY STUDYING THE LIVES OF THE KNOWLEDGEABLE PEOPLE OF THE PAST GENERATIONS , YOU WILL DEFINITELY REALIZE THAT , HUMAN EXISTENCE IS MEANINGFUL ONLY ONLY ONLY……..ONLY WHEN ONE IS KNOWLEDGEABLE ABOUT WHAT NEED TO MUST TO KNOW, only then we get insight what we are capable of doing.

    • GSOB

      Are you Catholic?

      • ceryl

        NO let us not argue anymore in the name of God.
        BTW i don’t like to worship anybody , like human or that big G creature.

        • GSOB

          Ok. A little to much info there. How about studying the life of Christ?

          • Ralfine

            Well, he was born out of wedlock, he had two fathers, spent most of his time in the company of men, didn’t respect authority, didn’t marry, didn’t have a clean shaven face, but at least he didn’t wear socks with his sandals.

            Then, at his crucification the disciple who he loved most (or who loved him most, not sure, check the bible for the correct words), stayed until everyone one else went to bed, took Jesus off the Cross, and washed him, told him to shut up, put him publicly in a grave and returned the next night to spirit him to safety, and told the other friends that Jesus went to a safe haven.

          • Tim

            Your comment is blasphemous and offensive to the Christian readers of this site. My Savior was NOT conceived out of wedlock because he wasn’t conceived by the physical union of a man and a woman. He was conceived in Mary’s womb by the Holy Spirit of God. He was a theanthropic person: He was God andman. As a result, He was without sin and was therefore able to atone for sins of His elect by the sacrifice of Himself. Furthermore, it was Joseph of Arimathaea and Nicodemus who took Jesus off the cross, anointed his body and put Him in the tomb (Mark 15:45, John 19:38) where He remained for three days and three nights before His glorious resurrection. He is now seated at the right hand of the Majesty on high. And soon He is coming back for His own, and that doesn’t include you. As for your other assertions and blasphemous allegations, I’m not going to waste my time addressing them.

          • Ralfine

            OK, you are right. He wasn’t put in a grave but in a tomb.

          • kathy k

            WOW! You need some bible study time.

          • Ralfine

            Too much violence for my taste. Killing here, wrath there, child abuse, mass murder.

            The last time I read it I didn’t have much choice. Thailand, midday, hot, the aircon in the YMCA wasn’t too good, didn’t want to go out either. Couldn’t watch TV, my friend was sleeping… So I checked out King James in the night stand. But they didn’t have the Old Testament.

          • GSOB

            Just please remember this Ralfine, death comes to us all and vengeance belongs to the Lord.

            I wish you well.

          • Jesus sinful brother

            Jesus is special, not because His performance, but His GENE, He is the only Begotten son of God.
            There are many Sons of God in Old testment, Adam is one example. There are many adopted sons of God in new testment. But Jesus is the only begotten when God make love to Mary, (Luke 1:45-46 She perform the love and magnify God Gene)
            Mary is gene related to Nathan, son of David (Luke 3:31)
            Joseph is gene related to many evil kings Solomen, Roboam, ….
            If you judge Jesus by His performance/behavior, you are total blind.
            He is God himself came to behaved like a sinful human.
            Heb 2:17 Wherefore in all things it behoved him to be made like unto his sinful brethren, that he might be a merciful and faithful high priest in things pertaining to God, to make reconciliation for the sins of the people

          • GSOB

            Your understanding of the atonement is skewed brother.

            There isn’t, hasn’t and never will be a sin committed by Jesus Christ.

            Jesus is God.

      • Gay Veteran

        or high

    • Joel Peeters

      No, knowledge is not power, it is POTENTIAL power. Knowledge is only worth when put into action. If it stays in our head it is just knowledge…

    • Lukas

      Where does your thinking steem from? No one knows everything, especially not the priests in all the religions. But they sure should know about the wisdom of god and teach the people. Nothing more.

  • GSOB

    “The saddest epitaph which can be carved in memory of a vanished liberty is that it was lost because its possessors failed to stretch forth a saving hand while yet there was time.”

  • ceryl

    WHO IS MODERATING MY COMMNTS

  • ceryl

    BURN ALL CHURCHES IN AMERICA INTO ASHES.

  • Ralfine

    Companies are allowed to post a loss to the irs and a profit to the stock market.

  • davidmpark

    Well, that’s it then.

    Glad I’m nearly ready. Also, Mike, would you mind a more complete urban rabbit production primer? I wrote out a lot more.

  • Ralfine

    If you want to sell your stocks because you think a collapse will come, you need to make the stocks rise first.

    You can’t expect a major crisis being over after just a few years. You have a first dip, that catches everyone by surprise, then people scramble out.

    To reduce the loss, people buy into falling stocks. After all – buy cheap, sell high.

    Then they need to drive the stock up and sell higher, to recover their losses from the first dip.

    If you only park money in the stock market you can live without, then you can wait, and wait and wait, and buy sensibly when the panic price is low.

    If you play roulette – all your live savings on red – then you react more easily to panic sell and bubble rise.

  • Ralfine

    Jaguar Land Rover is opening a new factory in England. And the new electric Land Rover is tested in different climates and terrain now after it attracted much attention at the Motor Show.

  • Joel Peeters

    For a long time now I’m reading the really well done blog of Michael about the Economy.

    I like the posts and the comments of the readers, but would it be possible to stop always calling upon God, Jesus or whatever on an Economic blog.

    We can keep our Christians or believers point of view, but why is there always someone here saying something like “pray God” or “Pray Jesus”, or more annoying making a whole “sermon” about the wickedness of men, or talking about Religion, and bla bla bla.

    As a lot of people here I’m a believer (and a strict one) but it is really boring to read comments which bring religious talking into the mix. Those religious discussion or comments does not bring anything useful to the debate.

    My two cents

    • chilller

      People’s opinion are protected by the first amendment. If this bothers you, I suggest you find a blog or country in which free speech is not covered by these laws. Stop trying to exert the influence of YOUR beliefs…I find it offensive. Same goes for you ceryl…

      • Joel Peeters

        First, with all due respect, first amendment apply for Americans not for the rest of the world (this is also offensive to exert the First US Amendment to other people).

        Secondly, I come from a country in which we also have free speech as in the US by the way.

        Thirdly, nowhere I exert any influence of my beliefs, you will never find any of my post with any of my beliefs.

        Fourth, if you read carefully my comment, my point was not to mix religion opinion and the goal of this blog which is warning us bout economical problems. Religious opinion distract from the main subject.

        • http://americandictators.blogspot.com/ WarriorClass III

          It takes Faith to go up against Goliath. Like our Founding Fathers who challenged the world power of their time, great faith and encouragement is required.

        • chilller

          I don’t have to tell you to go straight to hell…you’re well on your own way….take that in any language you like…JOEL!

          • Gay Veteran

            my, how christian of you

          • GSOB

            What’s your excuse?

          • Gay Veteran

            for what?

          • GSOB

            chill

        • GSOB

          What planet you live on?

          • Gay Veteran

            Earth

      • Gay Veteran

        I fixed your sentence: People’s opinion are protected FROM THE GOVERNMENT by the first amendment.

    • Hambone

      For what it’s worth, I think our economic problems and our abandoment of God are closely related. While I understand your point, that some of the posts seem like a broken record and completely unrelated to the article, I can’t help but think our country’s broken values system is what has led us down this path.

      What moral, God-loving person would run a country into the cr*pper the way our elected (and appointed) officials have?

      • GusFarmer

        Morality doesn’t require religious faith, just a recognition that we’re all human beings living in a society and a natural ecosystem that REQUIRES cooperation and fairness to survive.

    • GSOB

      “As a lot of people here I’m a believer (and a strict one) but it is really boring to read comments which bring religious talking into the mix.”

      What does that mean? i.e. a strict one?

      You are a believer? What kind of one? You suggest not talking about the King of Kings involved in the affairs of men.
      You need to check yourself and see if indeed you are in the faith Joel Peters.
      In any case,
      you are worldly, worse that an unregenerate Jew…. professing to be wise and yet deny the Christ whom you say has saved you.

      • Joel Peeters

        I’m an Elder in a Messianic Group is that enough for you?

        Godless? Me… hmmm, no.

        I just don’t mix different topic to keep the idea proposed in the post as pure as possible without a religious bias – and for one simple reason there are other people here which are not religious, even atheist probably, and out of respect for everyone I keep it simple without imposing my religious position.

        However, you don’t seems to be as respectful? Who are you to judge my heart on one post I made – do you know me enough to do that?
        Your comments shows that you don’t have any compassion toward your neighbour since you dare to condemn me.

        BTW, there are ways to be more polite, more respectful ways when someone makes a comment – especially when we are Christians.

  • Ralfine

    A home, like clothing, provides protection against the elements.

    Maybe it’s time to view the home again like clothing.

    I mean clothing, not fashion.

    Not primarily as a financial asset but a piece of thing that provides a function.

    Like a 2CV – bringing 4 farmers and a bag of potatoes to the market.

  • Rufus T Firefly

    30 years ago one of my teachers used to joke about how the stock market has correctly predicted nine out of the last five recessions. Nowadays it has predicted nine of the last five recoveries.

    Of course the simple truth is the stock market is only reserved for those who deserve to be rich and happy. Not for the vast majority of fools who are happy with DWTS and Honey Boo Boo. Those dimbulbs are getting the bare bones subsistence they deserve…the meek shall inherit dirt

  • chris

    A society cannot survive if it is composed of the corrupt and fraudulent governing over criminals, fraudsters, murderers and those who only want to play the system. Without the relatively honest and taxpaying section of society and those with a love thy neighbour attitude it will fall, and probably very quickly, into anarchy. By destroying Christianity and the middle classes they will actually destroy themselves. Interesting paradox.

    • Ralfine

      What’s wrong with anarchy? As opposed to hierarchy?

      You have to find your place without putting yourself above or below others.

  • Ralfine

    Just a thought:
    If you make divorce illegal, everything should be fine.

  • Sack man

    Michael. You have no clue how the stock market works. It will always make new highs due to increasing earnings leading to increasing dividends. And we have had 40% corrections in the past 13 years a couple of times. Normal. New highs afterwards? Yes. You keep covering yourself for scaring people out of the markets. Another 40% correction can happen and probably will. It won’t be the end of the world. As new highs will always be reached. Good luck preppers. Lol. Ps – read. Stocks for the long haul. Good book. And. Simple wealth, inevitable wealth. Stop being afraid people. The world is not a big conspiracy.

    • Gay Veteran

      “…It will always make new highs due to increasing earnings leading to increasing dividends…..”
      get a clue, if people can’t afford to buy then no earnings

  • Sack man

    Stocks for The long haul. By Jeremy Siegel. Simple wealth, inevitable wealth. Nick Murray. The end (not)

  • energizedmortal

    The reality is that what goes up must come down. A new world power will emerge and they will eventually decline as well. Life goes on… until the sun burns out.

  • El Pollo de Oro

    Even in Third World hellholes, some people will make a killing in the stock market. Big chunks of the population, however, will barely survive. And that’s the grim future of The Banana Republic of America, the rotting Third world cesspool that used to be Los Estados Unidos.

    Some people have a hard time wrapping their heads around the fact that this is now a Third World country. But I’ve been to Latin America and North Africa, and sure enough, the BRA is looking more and more like those parts of the world when it comes to the dirt-poor majority/filthy rich minority. Those who are divorced from reality will say, “Yeah, but all the yuppies who live in my condo building on Manhattan’s Upper West Side or Rittenhouse Square or San Francisco are doing great,” and my response is, “The yuppies I know in the north part of Bogotá are also doing great. You measure a country’s economic health by the size of its middle class, not by how well people are doing in the chi-chi parts of town.”

    • Mudpie

      Yes, but prepping is more or less “easily” done depending on location, type of job, income, etc. When things are tight it is tough if not impossible to prep while putting out fires.

  • skywatcher

    Let folks keep on buying those worthless bonds, stocks, treasury notes, mutual funds, dinar (hahaha), gold and silver certificates and the like. Let’s see if they can eat them or throw them to defend themselves when the collapse happens. Good luck, you’ll need it.

  • Trailer Park Investor

    LOVE rat meat cooked on a stick over an open campfire down by the river, make mine Well Done Please!
    I have a feeling, soon I will have lots of company. When that happens rat will become very hard to find, I guess we can eat dog and cat but what do we eat when that runs out???

  • Dave Webb

    The point I see here is the government is manipulating the books to keep the reality of a depression from hitting quite so hard.

    Otherwise the market would have plunged.

    Now who gets hurt? Well most of your pension funds out there are directly effected by the stock market. So if the pensions go broke then the most stable part of the economy goes down with it. Along with that the welfare rolls expand to fill the gap. None of which is financed properly.

    So we print more counterfeit money to make up the difference. Seems like a vicious cycle to me.

    One place they messed up was not giving Social Security benefit raises to compensate for the inflating currency. Using accounting they denied raises for 3 years. So all those grandparents supporting their children on their meager checks didn’t really work. Again welfare took up the slack.

    Another mess up was allowing those jobs to go to places like India and China and not collecting any income tax. We pay income tax, they don’t.

    People without jobs cannot support taxes. Neither can they afford to own homes. So you have a foreclosure rate out of sight.

    Part of the foundation of this country is the value of property. If it goes, then the whole shooting match goes with it. It is very bad out there.

    I maintain that the depression is all ready here and it effects everyone and the government because those people do not pay taxes.

    Apparently someone forgot economics 101 when they allowed all this to happen starting in the mid 90s. But I guess that is not the chief qualification to be a representative in Congress.

    All of this related to what happens in the stock market.

  • Ralfine

    Well, Jesus was a great guy. But today he’d be imprisoned or burned at the stake.

    • Rob Kinney

      Or at the very least, he would be under 24/7 surveillance and harassment by DHS for being a so called “threat to national security.”

    • GSOB

      Go take a bath and go take a hike will ya?

  • Gregge K Johnson

    Had to deposit a Bank Cashiers check for $48,000 dollars in bank ,and to get $8,000 dollars back in cash ,the bank said it would have to order CASH . It would take 10 to 12 days. What’s wrong ?

  • Mudpie

    I think unemployment is MUCH worse than they say. And adding affirmative action, and cronyism to the mix makes for a very volatile cocktail . . . . e.g., more whites than blacks found to be impoverished under recent statistics. Why do we have racial favoritism again as official govt. policy?

    • El Pollo de Oro

      Mudpie: According to John Williams of Shadow Statistics, the real unemployment rate in the BRA is around 23% when you factor in all the long-term unemployed Americans the government pretends don’t exist. And 23% is a frightening number because 23% was the unemployment rate in 1932.

  • Gay Veteran

    Bravo! GREAT article

  • Gay Veteran

    you always come up with some great quotes
    Want the truth? Gerald Celente is your man

    • El Pollo de Oro

      Gay Veteran: Yes, Gerald Celente is excellent. I always tell people that if they to hear the brutal truth about what’s going on, Signore Celente is the one to listen to.

  • Chris

    All the endless monologues from the scholars of this extended Roman Empire and their satrapies seem to provide a wicked false hope to the rest of the Earth that the man-made “laws” of economics applies to all ; and that it is an aberration that collapse has not occurred; meaning that relief is on the way where the squeezed lemons are concerned. Such scholars are to my mind misinformation agents, because what is being perpetrated is fraud and theft by the elites of the poorer nations with the backing of the leadership of these supposedly bankrupt nations that can borrow like there is no tomorrow. The more pertinent question to ask is why other countries are not able to run debts ad infinitum.

  • Lukas

    Yes, these Charts are convincing, if you look at it from a domestic perspective. But consider this:

    1) International capital flows
    a) there is so much money fleeing the Euro-System in search for capital and wealth allocation.
    b) we have a change from public ie. bonds to private ie. stocks, commodities..

    A lot of the money comes from the reduction in the bond volume. What Otter explanation is there for the FED’s bond buying programs.

    The US stock market was never domestic. You must look at the international capital inflows, beyou are right – most of the rise didn’t come from Americans, because they know and dont have the money to invest this vastly in stocks.

  • el duderino

    the stock market is denominated in dollars. correct for real inflation, say correct it using a real value thing, like gold or oil or pork or corn or what-have-you, and you can totally see that wall street is smoking far too much crack.

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