America's Economy: Real Recovery or Illusion

Updated March 2023

The American Economy and the Stock Market

To illustrate the essence of this topic, we will do so against a historical backdrop for a straightforward reason. Those who do not learn from history are destined to relive it. Furthermore, the discussion incorporates actual data that could be readily applied to analogous situations in the future.

The stock market remains indifferent to the authenticity of America’s economic recovery. Genuine economic recovery remains absent. A mere glance at copper or the Baltic Dry Index charts is enough to comprehend that every statistic the BLS presents is misleading. Numerous individuals, including fund managers, have refrained from participating in this bull market, justifiably asserting the following:

There are various reasons suggesting that America’s economy is not as robust as it appears:

1. Copper, a leading indicator, is caught in a death spiral, indicating underlying troubles.
2. The Baltic Dry Index, another leading indicator, also spirals downward, thereby rendering the economic recovery a facade.
3. Overall, market volume paints a grim picture, casting doubt on market conditions.
4. Unemployment figures are manipulated, with the BLS data failing to portray the actual scenario accurately.
5. Real wages have been in decline since 2000.
6. The impending explosion of student debt poses a significant threat akin to a ticking time bomb.

America’s Economic Recovery Is Illusory, Yet the Bull Market Remains Unfazed

We could enumerate numerous additional reasons. However, apart from adopting a pessimistic tone, such an approach wouldn’t offer any substantial assistance. This purported economic recovery is akin to a farce, as the Federal Reserve has solely amassed a colossal amount of debt to fabricate a distorted impression of stability.

That being said, those who held sceptical views find themselves grappling with frustration. Some even find their disbelief manifesting physically, metaphorically “kicking themselves in the shin,” and for a few, in even more sensitive ways. They struggle to comprehend how, against this dismal backdrop, the markets have surged so remarkably over the past seven years. The solution to this query resides in the realm of “mass sentiment.”

Our proprietary Anxiety Index also clearly indicates that the masses are nervous, and it is unlikely to crash until they embrace this stock market bull.

Shadow Stats’ Unemployment Data Exposes Fake Economic Recovery

America’s Economy Weak, Yet Market Poised for Higher Trend

While the narrative of an economic recovery is false, the current bullish trend in the stock market is anticipated to continue upward significantly.

However, please refrain from suggesting that you believe the markets can only ascend without encountering a correction. If you do hold such a belief, we possess a contraption that purportedly transforms rocks into gold, and we would be open to selling it for a considerable sum. Every bull market undergoes one or two notably robust corrections. The last substantial correction occurred in 2011; everything after that amounted to no more than minor hiccups.

The Federal Reserve will persist in playing psychological games by raising rates to create the illusion of stability. Nevertheless, foreign investors will persist in acquiring our bonds, effectively counteracting the Fed’s endeavours to raise rates. The Fed is fully cognizant of this dynamic and capitalises on the current opportunity to raise rates, thereby affording themselves more significant manoeuvring space in the future. Given the frail state of the global economy, increasing interest rates here renders our bonds highly attractive to the rest of the world. If this economic recovery were authentic, central bankers worldwide would be raising interest rates.

Concerning the stock market, we anticipate a robust correction prior to the conclusion of this bull market. Subsequently, this correction will be succeeded by a surge to fresh highs. Eventually, when the masses fully embrace this bull market, a long-lasting upward trajectory will take hold.

Update on America’s Economy and Stock Market – April 2020

The root cause of today’s challenges lies in fiat money. As the money supply expands, so too will the array of issues confronting our world. However, with the emergence of problems also comes the potential for opportunities. To seize these opportunities, one must abstain from succumbing to conspiracy-oriented theories and instead concentrate on implementing practical measures. About 10% of the population possesses a capacity for unconventional thinking, yet only around 3% effectively employ this information. The remainder is divided between those who gravitate towards the realm of “conspiracy storytelling” and those who adopt a “resistance” stance. Both of these positions are characterized by rhetoric devoid of tangible action.

There is also a possibility that the markets could experience two pullbacks; one could be minor and the other sharper in nature. We can’t predict the order, but needless to say, we view all sharp pullbacks through a bullish lens while the Trend is up. Market Update Feb 20, 2020

Amidst the prevailing panic among the masses, now is the optimal time to invest in stocks. Under the guise of the coronavirus, the global landscape has abruptly ground to a halt. In the years to come, people will regret not seizing the opportunity to acquire shares that were essentially being offered at a bargain. This pattern of missing out was repeated in 2009, and history is poised to repeat itself. The cycle remains unaltered; misery seeks solace in shared experiences, while foolishness unwaveringly calls for collective participation.