Monday, January 25, 2016

The U.S. Is In Decline.......

The U.S. Is In Decline

Markets moved immediately into crash territory after the new year began. As the Fed ends outright stimulation and manipulation, the house of cards falls.

Market turmoil is a guarantee given the fact that banks and corporations have been utterly reliant on near-zero interest rates and free overnight lending from the Fed. They have been using these no-cost and low-cost loans primarily for stock buybacks, purchasing back their own stocks and reducing the number of shares on the market, thereby artificially elevating the value of the remaining shares and driving up the market as a whole. Now that near-zero lending is over, these banks and corporations will not be able to afford constant overnight borrowing, and the buybacks will cease. Thus, stock markets will crash in the near term.

This process has already begun with increased volatility leading up to and after the Fed rate hike. Watch for far more erratic stock movements (300 to 500 points or more) up and down taking place more frequently, with the overall trend leading down into the 15,000-point range for the Dow.

It is astonishingly foolish to assume that even though the U.S. has held the title of king of global consumption share for decades, that our economy is somehow not a primary faulty part in the sputtering global economic engine. Economies are falling because demand is falling. Demand is falling because Americans are not buying. Americans are not buying because Americans are broke.

Americans are broke because central bank policy has created an environment of wealth destruction. This wealth destruction in the U.S. has been ongoing, but only now is it becoming truly visible. The volatility we see in developing nations is paltry compared to the financial chaos we now face.  

China is the largest exporter in the world, not the largest consumer. If anything, a crash in China's economy is only a REFLECTION of an underlying collapse in U.S. demand for Chinese goods. That is to say, the mainstream dullards have it backward; a crash in China is a herald of a larger collapse in U.S. markets. A crash in China is a symptom of the greater fiscal disease in America. 

The U.S. is the primary cause; it is not the victim of Chinese contagion. And the crisis in the U.S. will ultimately be far worse by comparison. Chinese contagion" has been used as the scapegoat for the downturn in order to hide the true source: American wealth destruction.

The U.S. is the No. 1 consumer market in the world with a 29% overall share and a 21% share in energy usage, despite having only 5 percent of the world's total population. If there is a global slowdown in consumption, manufacturing, exports and imports, then the first place to look should be America not China. Global demand has fallen down a black hole, and the U.S. is at the top of the list in terms of crashing consumer markets.

U.S. petroleum consumption was actually lower in 2014 than it was in 1997 and 25% lower than earlier projections predicted. A large part of this reduction in gas use has been attributed to fewer vehicle miles traveled. Though oil markets have seen massive price cuts, the lack of demand continued through 2015.

If one were to remove government spending of taxpayer funds from the equation, real GDP would be far in the negative.  That is to say, if the fake numbers are this bad, then the real numbers must be horrendous.

Anyone who attempts to dismiss the dangers of a U.S. breakdown or the threat to the unprepared public is either an idiot, or they are trying to divert and distract you from reality. The coming months will undoubtedly verify this.

Economic and political officials could argue that to reveal the truth of our fiscal situation would result in utter panic and immediate social breakdown. When 80% of the citizenry is completely unprepared for what is coming, it makes complete sense that their first response to such dangers would be predictably uncivilized.

Of course, the powers-that-be are not really interested in protecting the American people from themselves. They are interested only in positioning their own finances and resources in the most advantageous investments while using our loss and fear to extract more centralization, more control and more consent. 

Thus, the hiding of economic decline is enacted because the decline itself is useful to those in power. 

And just to be clear for those who buy into the propaganda, the U.S. is indeed in a speedy decline.

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