It’s going to happen.
The market crash is coming. And, it’s not too far away.
All the forces are already in play.
The greatest economy in the modern world is about to brought to its knees.
This is not caused by hard-workers, private capital, personal freedom, entrepreneurial spirit, or the mysterious working of the free-market.
No. Like other terrible economic events in the history of the United States, this inevitable consequence is caused by government.
Free-market capitalism has been abandoned by both the Democratic and Republican parties for a quasi-socialist state. Every aspect of economic behavior is controlled or, at the very least, influenced by government direction. If not outright control.
All blessed by the Supreme Court with its deference to the regulatory powers of the government. Why even make a pretense of a government of limited power when the Court says there is no limitation on the federal government's taxing power and commerce powers.
Politicians and their economists run the financial system for their benefit. It’s a real sick situation.
And they are running it right into the ground.
Let’s face the facts.
The Fed has been creating money out of thin air and stuffing it into the economy for the past eight years. It’s been a policy of failure.
Since there is no political will to cut spending, the collective political decision is to keep borrowing massive amounts of money. While the Fed, run by economists, keeps the interest rates effectively at zero.
It creates a nice illusion that things are not as bad as they are.
It’s like Harry Houdini is running the economy.
Everyone at least viscerally knows that they are in a financial squeeze.
Even the supposed strength of the financial markets reflects the problems.
Not too long ago Wall Street convinced investors to spend $12 to get $1 of corporate earnings. Now, investors must spend $18 to justify buying the same shares. To keep the Dow and S&P going up while earning go down, the P-E ratio must go to 19:1.
Even the best of the corporations, like Caterpillar, Microsoft, and Alphabet, have been major earnings disappointments. There is virtually nothing coming up that will fire up growth in any sector.
Despite all the statistics spewed out by economists, corporate earnings are stalled. For the midsize and small businesses, the outlook is bleaker.
There are no pro-growth policies by politicians. No special insights into understanding the markets by the economists. All they have created is a cost without benefit and cover stories to justify it all.
The American financial markets are giving way. It’s only a matter of time before they crumble.
I do not know how it is going to all sort out. Unwinding the financial fiasco that encompasses the American economy will be both messy and painful.
While there will be a lot of blame to go around, the American financial markets are being defrauded by our politicians and their armies of economists.
is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.
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