Since March of this year, we have seen growing consensus and excitement from the mainstream media and government about an economic recovery underway. Scattered economic indicators are released and spun in a positive light when they are proportionally minuscule improvements compared to the declines already experienced for each given indicator. They typically use this sugarcoated data and ignore reality to say “the worst is behind us, yet perhaps we’ll still see a 10-15% correction in the markets, and growth might be slow for quite awhile”. In under six months from the low, the markets have rallied over 45%. Yet this type of market move up hasn’t been seen since the lead-up to the crash of October, 1987.
It is extremely difficult to find a true bright spot in the economy that indicates improvement enough to warrant such optimism. To begin, here is a brief update about the 4 key underlying economic problems outlined within Arbitrary Vote’s original warning article:
1. Unprecedented, massive amounts of existing and coming national debt – U.S. national debt has continued to increase and there is no sign of future debt letting up.
2. Foreign reluctance to fund U.S. debt – China, Russia, Brazil, etc continue to back away from U.S. Treasurys, diversify into other investments, and make moves toward trade in non-U.S. currency.
3. Declining productivity and indicators of poor future productivity – GDP has continued to fall and unemployment has continued to rise. Recent political action, reform currently on the table, and mounting taxation all point to future productivity damage.
4. Unprecedented, massive levels of money printing – The printing presses have been running non-stop and there’s no real sign of them letting up. Much of the recovery hype has stemmed from economic illusions caused by this temporary “fix”.
All of these factors have continued and mostly worsened since June. Each plays as significant a role as ever in the near- and long-term direction of the economy.
Read the rest at Arbitraryvote.com