Posted on 01/14/2021 7:02:24 AM PST by SeekAndFind
The U.S. Congress is in the process of approving a new stimulus package designed to counteract the damage from the COVID-19 pandemic. Pledging to spend $900 billion on stimulus checks, unemployment benefits, and other perceived benefits for both companies and the American people, this deal is set to help people get through the late stages of this practical nationwide lockdown.
If this bill would have emerged a year ago, it would have been the most expensive spending bill in American history. But of course, that record was set by the $2.2 trillion stimulus package passed by Congress in March 2020.
Economically, the country seems to be doing just fine. Most analysts and even average consumers look to the health of the stock market as a kind of barometer for how the country is doing financially. And the stock market is doing quite well, reaching new all-time highs.
But wait -- the economy is doing horribly, at least on paper. Unemployment is still unbelievably high. Imports and exports are practically shut down. Millions of small businesses have closed permanently as a result of the pandemic. We’re still struggling with the damage from nearly a year of lockdowns. And on top of all of that, the virus is still circulating. The damage is still being done.
And the stock market is still growing.
The Dangers of Stock Market Inflation
This isn’t good news. Stock prices may be going up, resulting in short-term gains for investors, but the long-term economic damage is hard to even imagine.
(Excerpt) Read more at americanthinker.com ...
The hollowing out of the middle class continues. Destroy small business thru forced shutdowns, lower interest rates to destroy savings accounts thru inflation, create more fiat currency to fuel money to the big businesses permitted to remain open.
I’m putting all of my money in hopium and unobtanium. The stocks of the future!
And this collective brain is telling us something. We just have to figure out what it is.
It sees the Biden election as a positive...and it is still climbing.
Given that the market is the present value of future earnings and, hence, future events, it is telling us "it" sees something very positive re: earnings.
Question: How would the market react to the absorption of the U.S. economy by China? Would it be a negative...or a positive?
I ask that question because the market, in its collective wisdom, sees that as a possibility now that China has stolen the U.S. presidency.
All that cash has to go somewhere.
Stocks are the only place that can temporarily inflate quickly.
Tech oligarchists steal all that cash in moments, and plow the surplus into stocks, and to a lesser extent housing near their offices.
That’s it.
Company stocks do well when they shed American workers and replace them with either automation or Asian scabs; an improving stock market generally means a decline in opportunity for American workers.
Small business and landlords are republicans purposefully destroyed.
Leftists in the F500 love that.
Gyms are going out of business, but manufacturers of personal exercise equipment are booming.
For every local restaurant that has gone out of business there's another one that is making a fortune doing home deliveries to neurotic Karens and their families as they sit at home with masks surgically attached to their faces.
I was on a business webinar a couple of months ago with some people in supply chain positions in major companies. One guy had some great insight into the alcoholic beverage business. His business -- he's a major regional distributor for one of the big beer companies -- is booming. He said what COVID has done is simply change the way people drink alcohol. Instead of spending $10 on a couple of beers after work, they're spending $10 on a 12-pack of Bud Light or Coors and drinking at home. This means they're drinking a lot more beer for the same price -- which means his business can't even keep up with the deliveries to liquor stores, convenience stores, etc.
“lower interest rates to destroy savings accounts thru inflation”
Anyone allowing significant amounts to sit in a savings account has had their head in the sand for almost 50 years. There’s been multiple opportunities to gain wealth during that period, some of which have been incredible.
You can’t teach people who refuse to learn.
Yep. And in this case, there is much, MUCH more.
The current DJIA divisor is about 0.15198 so a DJIA of 30,000 is really only worth about 4,560.
I am not a market guru, but it’s my observation that when everyone tells me this is a great time to be in the market, it’s NOT a great time to be in the market.
Last March/April was a fantastic time to buy in, when stocks were cheap (Apple was half price!) and everyone was running for the door.
I suspect the next few months may give us an another buying opportunity, but it’s not today.
You are right about alcohol consumption, thank goodness there’s not been a run on good whisky!
Airline stocks are a good indicator of the economy, IMHO.
Several of the good ones were cheap last spring. They have climbed back to about 2/3’s of their old value - but personally, I suspect that’s the top. Tourist travel is dead and won’t return for several years, if ever.
I’m not thrilled at the propect of wearing a mask for several hours under the watch eyes of multiple Karens to go on a vacation... and apparently I’m not alone.
Gee, I wonder if the effective ownership of the U.S. presidency by China now improves the earnings outlooks of these companies?
We may see a similar surge if/when international travel restrictions are relaxed.
I don't expect it to last. I see airline travel as an industry that is slated for a long-term decline.
The key is not out-guessing the market, the key is your age.
Young people should be heavily in the market. If it rises they can enjoy the gains. If it crashes they have time to recover.
Old people need to lower their risk very substantially. That means they will have to take on inflation risk with low risk low returns, but they simply cannot afford a major market crash.
I am convinced that the financial advisors out there have old folks in portfolios that are dangerously risky (overweighted in stocks).
I am all out as of now. I expect a major market correction in the next 12 months.
When it tanks and it will I will look to get back in. The only question have is how low will it go.
I ate it on the last two corrections, not this time.
“ Stocks are the only place that can temporarily inflate quickly.”
With all this stimulus cash and leaping debt, severe inflation will soon be here. Stocks, real estate and precious metals are the ways the average person tries to save wealth. Stocks will go down eventually, but are a good bet for the short term.
We will soon have a negative -3 or -4 interest rate. Money is a problem.
The four Western Central Banks, Japan, USA, Britain, and the EU have essentially failed.
By Summer 2021, one central bank will have to take one for Team West; I predict the European Central Bank will fail and the bailout will fall to literally propping up not the ECB but rather the National Banks in each Country - Germany, Italy, Belgium, France, Poland, etc., will have their chance at new currency or retain the bankless Euro
The US will become the second central bank to go down, simply because the DNC choose a Raw Power Grab. America is an imorale whore soon to led by the VP Harris who was literally a Call Girl and play thing for Brown.
At some point the pressure on the G7 or G9 or G19/20... you get the point - they cannot in concert continue to print similar amounts of money for their nations....
The interest rate in the USA will be 20% if the currency fails.
The USA currently has essentially a -1 interest rate at present (it is going to get worse).
I’m sure; no more obstacle named President Donald Trump in the way...
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