The Myth the Economy is Recovering

The Dow hit a new record high yesterday, topping 14,264. The previous record was 14,198.10, set in October 2007, when investors were squarely focused on the Federal Reserve (Fed). The Fed had cut rates for the first time in four years and bought over $40 billion a month of toxic debt from banks because the housing implosion was hitting consumers and the broader economy. In 2009 through quantitative easing (QE) measures with the investment banking institutions the Fed’s actions have juiced stocks in the attempt to create an illusion of growth in the economy to create a so-called ‘wealth effect’ through higher stock market prices,  even though capital formation after the 2008 financial crisis remains slow-going.
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When the Dow last reached 14,000 in October of 2007, gold was around $700 an ounce. Today – 2013, with the Dow  hovering over 14,000, Gold is around $1600 an ounce. If one invested  $1000 in the Dow in 2007, in 2013 they would only have $985  saved in their portfolio with dividends reinvested.  However if they invested a $1000 in Gold in 2007,  by 2013 they  would have $2,290 in their portfolio.  Because of inflation and weakness in the U.S. Dollar due to increasing levels of  government spending and rising sovereign debt, the Dow would have to be over well over 20,000 in order for it to be equivalent, in terms of real money – gold,  to what is was worth prior to the 2008 financial meltdown.
Federal Reserve HoroscopeToday, the Fed is directly injecting $85 billion (buying toxic mortgage backed securities and longer-term Treasuries per month) into the spending stream without relying on lower interest rates and the financial system, whose projected balance sheets will reach nearly $5 trillion in toxic assets by 2014! What is clear is that the stock market is no longer a leading indicator for the U.S. economy but now just another manipulated marketing instrument for the Fed. By the Fed continuing to push the stock market to new high’s while capital formation in the real economy continues to stagnate while unemployment  remains high (16%), and  as personal incomes continuing to decline (at a 20 year low) the purchasing power of the U.S. Dollar will quickly erode.  The financial repression created by the Fed’s post 2008 policies will likely lead to an implosion of the expanding “Debt Bubble”, that in the end will result in full-blown monetary crisis with catastrophic consequences for the United States and the world.
FED Blackbox ForecastThe next Uranus-Pluto square alignments will occur on April 20th and on November 1st, and will be hitting the heliocentric North Node of Jupiter – the planet of economic expansion and wealth. Therefore we can expect a continued intensification and acceleration of economic instability, political breakdown among the G20 nations  resulting in full-blown currency wars,  and social and political breakdown particularly in the U.K. and the European Union, due to a weakening economic environment of bankruptcy, monetary debasement, high unemployment followed by large scale demonstrations, nationwide strikes and riots in major cities. In the United States we can expect   increasing polarization and political partisanship, austerity, and rampant inflation with the Federal Government in taking measures against its own citizenry.

UrPL GraphPrediction:

 The U.S. monetary crisis will ultimately lead to radical reconfiguration of the monetary system and global power structure with the emergence of an International Reserve Currency that will be traded among nation and will be convertible into gold and a basket of other commodities to restore global economic stability that would be consistent with the accelerating trend of globalization.

2 thoughts on “The Myth the Economy is Recovering”

  1. The US government, the Fed, and the criminals on Wall Street are perpetuating a grand Ponzi scheme that will ultimately collapse. Afterward, there will be no hope of anything that could be construed a recovery. Besides a vast deepening of the present depression, the US will suffer immmense political turmoil and civil strife, leading to a particularly nasty civil war. A world war is also coming. I cannot say when it will start. But it will lead to America’s destruction. God is weary of her playing god of the Earth. Even if He stayed out of it, though, America would still be doomed just like some tragic hero-villain in a Greek play. No individual or nation can dare to cultivate the magnitude of hubris that America wallows in without paying an immense price. That is beside the fact that her ways are the epitome of folly in every aspect worth considering. Like some insane missionary intoxicated with self-righteousnouss, she has done far too much to change our world into her version of a utopia. In the process, she has sown the crops of destruction for all nations. Only because God will intervene enough to spare our world from bcoming a dead planet will life on her persist beyond the horrors, cataclysms, tribulations, and woes that are headed toward us. No nation that now exists, however, will survive them. Their dstruction will open the door for humanity to change for the better and establish civilizations worth praising. They will be true utopias. Money will be something discussed in history classes as enormously repugnant and toxic. America will be remembered as an object lesson. Her name will only be mentioned with such names as sodom and Gomorrah….

    Do nothing to oppose any government. Faith, nonviolence, and wisdom are the keys to prevailing against the forces of destruction….

  2. By the way, I suspect that your predictions will probably prove fruitful in the short run. In the long run, however, mine will prove true…No matter how dysfunctional the global economy bcomes, America will pitch fits and cause all sorts of trouble, while trying to prevent other nations from replacing the dollar as the global reserve currency. The process of establishing a new one has already begun. Ironically and appropriately enough, America’s obsession with punishing Iran serves as one of the main factors in that developmnt….

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