Deflation is about to rear it’s ugly head.
What is with all shock being exhibited by TV “experts” about the conditions of the market these days? This is the condition the market has been in for years. Or better put, these are the days that quantitative easing (QE) by a Federal Reserve – in business to protect the interests of banks and Wall Street investors – have been artificially avoiding.
Sadly, you can only print so much funny money and spend just so much of other people’s money, before you have to stop. Now that the QE fig leaf has been brushed aside, the market is reflecting the conditions of the actual economy.
Whenever I correctly pointed out that we were not in a long recession, but a depression, the most common response was don’t be silly, look at the stock market.
The last depression was heralded by a crash in ’29. We hear folklore about people throwing themselves from office windows at the unraveling of investments. The fact is it was the later crash in ’37 that had more people by far jumping out of windows. Before and after the ’37 event, FDR’s socialist opportunism and an avalanche of totalitarian regulation and market interference prolonged and exacerbated the depression[1. Read The Forgotten Man by Amity Shlaes ]and please excuse the long link. Obama has us reliving 1937 by means of the same government meddling in things economic.
Yes, an oil glut doesn’t help, but the oil glut was by no means the main trigger for this slump. It was the Fed backing away from QE (our phony, government rigged stock boondoggle) and China’s top heavy, centrally planned economy (their phony, government rigged stock boondoggle) running out of options to feed greedy market gamblers. The two economies are mutually dependent.
Next will come a period of deflation[2. With oil and a slack retail season, deflation has already started] in which cash will be king for a little while.
The business news feeds are full of prognosticators who never saw QE as a problem in itself, telling you all is well or nearly so. It is not. For my part, I am prepared to move money quickly, dump anything that doesn’t have very strong fundamentals and I am not afraid of converting weak performers into cash.
Throughout the coming months, remember who got you here: Obama, the four morons[3. In my book, 16 20 24, and often here, I refer to the four morons; Pelosi, Reid, McConnell and now Ryan.] and anyone with more than six years in federal office. Perhaps the road to recovery lies in rising up, FINALLY, and flushing out the entire leadership of both parties.
I’ll give you an easy way to start. Copy and paste this article in an email to your senators and reps. You can also call them or write your own letter. But have a little backbone and do it! Or you can continue to watch all your investments circle the toilet. Your call.
Matt Jordan is a travel writer, political commentator and author of 16 20 24. Get your SIGNED copy here!
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