Immediately following the great crash of 2008, people began writing articles on the Internet attempting to explain what happened that lead up to the event. It was not difficult to understand, for a combination of heavy indebtedness, wages beginning to stagnate or decline, the continued outsourcing of work as well as the deliberate disenfranchisement of entire classes of people using the law, the forced expansion of the labor pool, and then tremendous amounts of unpayable debt caused a complete failure of economic systems.
I have argued for years, based on my research, observation, and experiences that the economic crisis never ended, but simply has changed form. This is different that problems in society, which also mutate and change form by culture, but that the collapse that happened in 2008 as a specific event has never ended it itself. It is sort of like a carpet that one rolls out from a cartoon, where the character continues to roll it and it seems as though there will be no end. That is what has happened, with the collapse, for it is a carpet that has been unrolling with no end in sight.
Valuewalk.com recently put out an excellent article discussing the situation of the economy and the link between stock prices, economic instability, and the perception of wealth.
There also has been a lot of speculation as to the effect that an economic downturn will have on the 2020 Presidential elections. I have not seen anyone talk about how today’s high stock prices will likely cause an economic collapse.
There have been numerous suggestions coming at things from the opposite direction, making the case that a recession will likely cause stock prices to fall hard. But I view that way of thinking about things as a holdover from the Buy-and-Hold Era. If stock price changes are caused by rational assessments of economic developments, it would make sense that economic bad times would cause stock prices to fall. But I believe that Shiller’s research showing that valuations affect long-term returns is legitimate research. If that is so, then high stock prices are caused by irrational exuberance and the inevitable disappearance of irrational exuberance causes trillions of dollars of consumer spending power to leave the economy, causing a contraction.
If that’s the way things work, the economic crisis of 2008 never came to an end. Employment numbers improved and businesses stopped going under. So, in a surface sense, economic conditions certainly improved. But the economic numbers improved only when CAPE levels returned to the dangerous levels that applied prior to the onset of the crisis. We pumped up stock prices to make people less fearful of spending but at the cost of insuring that a follow-up price crash would be coming in not too long a time.
So the economic crisis never really ended. It went into remission. If the economy was booming with stock prices at reasonable levels, we could take comfort that good times really had returned. But I don’t feel able to trust a recovery that is financed by an overpriced stock market. Overpriced stocks makes us feel that it is safe to spend again. But the financial security pushing spending forward is illusory. There is no “there” there when stock prices could fall to fair-value levels at any moment and trillions of dollars of spending power could be taken off the table again.
I am not a fan of illusory stock prices. I think that we all should be doing all that we can to keep stock prices at something close to fair-value levels at all times. All of our financial planning decisions depend on us knowing how much wealth we possess and it is not possible to know this for so long as stocks are priced at two times their real value, as they are today.
We cannot even form reasonable assessments of the merit of the actions of policymakers at times when high stock prices are causing the economic numbers to look better than they would look if stock prices were at reasonable levels. President Trump naturally says that it is his policies that have brought on good economic times. But how can we know how the economy would be doing if the entire stock market were priced at one-half of the level at which it is today priced. And I of course do not intend to make a partisan comment here. President Obama’s policies looked better because of the effect of high stock prices as well. (source)
The US dollar is currently operated by a fiat type system, and fiat-money systems, especially with credit expansion, do not last forever. They either have to be changed out by natural means (i.e. the governing authority steps in after a period of usually about 30 years, abolishes the old currency, and has the people buy into a new currency with their old dollars at the same rate for the sake of preserving value), or eventually collapses through hyperinflation (the printing of money to the point which the currency becomes worthless), or through stagnancy and inflation (“stagflation”) leveraged by targeted financialization (the printing of money and the distribution of credit, but to specific buyers at specific rates of usury), which causes a slow, long-term economic decline that eventually ends in a collapse or hyperinflationary scenario, but not without first enervating most of the people of most of their wealth and means, as well as a hope for the future since nobody will have money to pay for anything and there will be such little work with so many seeking work, and what work exists is unable to support an individual on, let alone even more.
There is much to be said that is critical about the actions of the citizenry and her people, for many certainly helped to cause this mess by their choices. I have pointed this out many times in the Shoebat archives, and it is also one of the main reason of my criticisms of Trump, Obama, or others, because seeking “heroes” that are at best reflections of the bases impulses of the self in society does not help anything but a man to feel OK in the moment. Criticism should always begin with the self, regardless of who it is, and most of one’s efforts should be focused on self-improvement, for this is where a man can be most effective for himself and others. It is not to promote “selfishness”, but rather getting the most done with the least efforts as fast as possible for the best end.
However, one cannot deny that there is a parasitic “elite” class that rules the US. These people are not “THE ELITES” as talked about by many a radio and Internet sensation, but they have names, faces, families, and they put their pants on in the morning just as everybody else does. They are not aliens from another planet or dimension of reality, but walk the streets and breathe the air all men do.
These people are generally speaking very wealthy, and they are generally very interested in Darwinism or variants of darwinian philosophy, and they usually have strong interests in artificial intelligence, bioengineering, evolution, and supercomputers. This is because these people, who are overwhelmingly represented in the financial sector, heavy industry, and increasingly data management, and while comprising many diverse backgrounds tend to be by admission or silence of disproportionately Jewish extraction, believe in some way that the next phase of human evolution is upon the world, and that they (either saying it or not) will “evolve” into a sort of divinity living forever in futuristic, science-fiction like space colonies and conquering the universe, while the rest of the human race, if it is not enslaved or put to other use, will eventually die out in mass.
The financial collapse that began in 2008 was not an accident. It was deliberately engineered decades ago to happen just as the “refugee crisis” in Europe was engineered also decades ago. It is all about policy manipulation and forcing good people who are not stupid, but average, into accepting ideas that are not good by systematically lying to them using advance psychological techniques for “marketing” developed primarily in places such as the US, UK, Germany, Japan, and Israel, against the common people to get them to enslave themselves by debt, then to take away their livelihoods slowly, and eventually that of their children.
A lot of good people- honest, hard-working, God-fearing, decent people -were deliberately lied to, manipulated, and robbed by legal means, and then told that it is their fault for not being either intelligent, industrious enough, or good enough by the same people who foresaw what was coming because most of them were robbers who had planned the event for their benefit.
Decades ago, it was possible for a hard-working man in a waiter’s job to have an apartment and pay for food with a wife and five children. He would be poor, but would be able to have a roof over his head and food on the table. Today this would be impossible, as he would have to work at least two jobs, and his wife at least two, and even then, they would likely have to apply for public assistance because it does not matter what their efforts are (even as their employer will make more demands of them), but it is that the value of their fruits are being robbed largely by monetary policy and outright greed from employers. Then to tell a person such as this- many of whom today have college degrees because they were told by their parents, teachers, neighbors, guidance counselors, and anybody in a position of trust in society that they had to get one in order to get a job that would allow them to support themselves and they trusted them as good people -that it is their fault, they are dumb or stupid, and that they just need to work harder and “suck it up” or that they are just failures, is to take a razor and slit the already bleeding wounds on their beaten bodies and souls, then to pour salt into them and as the person cries in pain to say “This is why you are a failure, you are weak and not strong like me.”
At the current time, there is no way to stop further economic disaster from coming. It is inevitable. Based on the evaluations I have made, it is suspect that a major economic crisis will likely begin around 2023, although it could happen earlier or later.
Regardless of the time, the fact is that while there is not a public acknowledgement of the state of affairs or an “event”- real or manufactured -that would trigger further disaster, now is the time to act as one can.
In addition to prayer and fasting and getting right with God- the fundamental things that matter over everything else -the temporal provisions one can take I have noted in the Shoebat archives, and they are to save up as much money as possible, work as much overtime or get a second means of employment (even if it hurts), and to reduce expendatures as much as possible while either stopping the accumulation of debt or starting to pay down debts.
It is not easy, and I do not make light of this. I also do not claim to know everybody’s personal situation. What I do know is that in order to endure the future, many sacrifices that would be considered by the American public to be extraordinary will have to be made. It is better to start now with these sacrifices and adjust to them so that when trouble comes, it will be easier to endure, as opposed to having to adjust quickly, for while most people can survive hard times, what destroys most people is the initial shock from the change and the enduring consequences that come from the lack of awareness about it. It is similar to jumping from a large building knowing there will be injury. If one is prepared, one can usually endure the fall and if there is injury, to continue on- but if there is no awareness of what is coming, the shock can gravely injure or kill the person.
The economic signs are there. Ignore the stock markets and the rubber-lipped pundits who open their mouths to shout for higher prices and that all is well, but rather keep one’s head down and focus on ordering one’s own house. This will be the most effective way that one can help himself and others.