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The Stock Market Surges to 20K And The Masses Applaud Their Own Doom

The Stock Market Surges to 20K And The Masses Applaud Their Own Doom

Make no mistake folks, the stock market surge is based on credit and at some point, that credit is going to default. The scary part is, we all know this, we all know our country is borrowing to pay debt, our citizens aren’t saving, it’s not a secret and yet, we are applauding this credit driven stock market boom, to our own demise.

I heard it once said…or read it somewhere which is more likely…, “we can’t avoid the final collapse of this boom from credit expansion. The only choice we have is should the bust happen sooner because we voluntarily stop borrowing or later as the currency system collapses on its own”

Essentially, the problem is, our debt is growing faster than our GDP. Folks, it’s just not possible to grow the debt faster than what we make. Guys, it’s simple math…it’s going to stop.

As I read about this some more, it was put this way to me…… “So let’s run the math experiment as ask what will happen if the Fed is successful and total credit grows for the next 30 years at exactly the same rate it did over the prior 30. That’s all. Nothing fancy, simply the same rate of growth that everybody got accustomed to while they were figuring out ‘how the world works.’ What happens to the current $57 trillion in TCMD as it advances by 8% per year for 30 years? It mushrooms into a silly number: $573 trillion. That is, an 8% growth paradigm gives us a tenfold increase in total credit in just thirty years:” Chris Martenson with PeakProsperity.com

To drive this home….the GDP of the ENTIRE GLOBE was only 85 Trillion in 2012. It’s going to crash….it has to and when it does, the dollars in our pockets will be worthless…literally not even worth the paper they are printed on. So….when you see all these people cheering and raising the roof over the stock market, don’t forget, it’s got to bust at some point and maybe sooner than later considering we are now over the 90% debt to GDP threshold.

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Comment by Violetta Polyakov, Broker on February 6, 2017 at 4:43pm

Its an interesting topic.  We all know the crash is coming, be it stock market or real estate market, its all cyclical and there will be inevitable crashes and gains.  The problem is that all depressions and recessions were created artificially by bankers and government. It would be relatively easy to predict and regulate and minimize the impact if there were no dark money involved and no billionaire clubs greedy for profits and world domination who creates the havoc. All we have to do is try to save ourselves some grief by finding a way to diversify and invest into more stable currency, stocks, bonds, gold.  At this point, I don't believe that stock market, real estate, gold, coins, foreign currency are valid venues for protecting your future and savings.  I would love to hear ideas and suggestions from everyone. The dollar is becoming weaker every day, inflation is coming, stock market will crash, real estate is at the brink of another bubble burst, pound lost its value with Brexit. Our new government is for deregulation and arms race as well as making money for billionaires.  What can we do to save ourselves?

Comment by John Gattinger on January 12, 2017 at 11:19pm

I'm a skeptic of Wall St. but after watching the Obama administration do a pretty good job of fixing Wall St. over the last 8 years (Mainstreet perhaps a different story) it made me rethink my whole philosophy of Austrian economics.  Every dollar printed into existence has a debt attached to it so it is impossible to increase the money supply without increasing the national debt.  This is why Congress will never fail to raise the debt ceiling.  Surprisingly most US debt is not to China it is to the Federal Reserve paying off IOU's funded by our taxes.  Perhaps the largest ponzi scheme in existence having a privately owned corporation masquerading as a Central Bank.

The market is in pretty direct correlation to the interest rate again controlled by the Federal Reserve.  Low interest makes credit cheap which is where we are today.  I definitely agree with the analysis of a correction in the near future, but in my opinion it has nothing to do with the debt, just that cheap credit will dry up unless Trump unveils an economic spending plan relatively similar to Obamas.  Otherwise, less credit equals fewer dollars in circulation, fewer dollars in circulation means the dollar will become more valuable against commodities...a big reason why oil & gold are quite low today.  This is deflation and is probably where we are headed next if they continue to raise interest rates and fail to print stimulus.

The important thing to know is not to fear the world is coming to an end market crash.  Cash, gold, bitcoin?  None of them have any inherent value to humans if there was ever that dreaded "crash", it's a catch 22.  These systems of control only remain relevant if the systems remain greased.  The world provides ultimate balance so for every negative loss there is a positive to be gained somewhere else.

Comment by Matt Rachow on January 3, 2017 at 11:16am

I've read about this scenario through, Jim Rickards, starting with our losing the reserve currency status. The obvious question would be how to prepare for the possibility of this challenging future?  (Sell everything and buy gold?)

Comment by Marcy Moyer on December 19, 2016 at 12:47pm

I always know when you are right when you and I agree on a Political/Economic event. When two opposite belief systems concur, truth can be found.

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