Main Street America is the pulse of the country.
Though two-faced politicians, sneaky bankers, Wall-Street scum, and central planners keep thinking they’ve got all the moves and know all the answers, the truth is that when the American consumer feels good, the rest of the world is booming.
The average American’s consumption appetite works like jet fuel for other economies.
For ten years, Europe and Asia have missed the “Shop till you drop” mentality by Americans, but tax cuts, wage increases, better job opportunities, and especially a renewed hope in Trump’s vision of a “Strong U.S.” are all providing the backdrop for the resurgence of middle America.
The only problem is that, for more than 100 years, politicians haven’t been transparent with citizens, especially when it comes to economic booms and busts.
Though it is well-known in Washington that drug money plays a vital role in keeping banks afloat, that the Deep State is swallowing the largest budgets out of the tax-payers’ pocket, and that the President has a minimal say in what the shadow government perpetrates, most people in the U.S. don’t know what the NSA is, or in what countries U.S. troops are currently stationed.
In fact, most Americans can’t even place the location of Vietnam, Iraq, Venezuela, Afghanistan, or Libya on a world map.
The Petro-Dollar has shielded U.S. citizens from real-world consequences of fiscal and monetary negligence. While all presidents knew they were living on borrowed time, since no country has ever survived the reckless game of deficit spending, they seem to think the laws of finance don’t apply to them, or worse – they don’t care.
Either way, the fact remains that in the U.S., the habit of saving is bullshit. Politicians steal from the treaaury and consumers overstretch their credit cards as well.
As you can see, before 1971, when the gold standard was keeping politicians at bay, savings rates were above 10% – that’s very good.
Most people around the world strive to keep 10% of what they earn.
But, right after the gold standard was defaulted on in 1971, the country started on a path with one clear trend – save less.
Today’s savings rate stands at 2.4%.
That’s 75% below where it should be for the economy to be considered healthy.
So, how does the U.S. do it? How have we managed to not only stay afloat, but also to keep having the world’s largest GDP and to still be recognized as the best for conducting business?
The answer is innovation and ingenuity by the private sector.
It has zero to do with the government and everything to do with people like you, who bring good values, progress, independent thinking, and productivity to the workplace.
It’s as if we are waking up every morning to make the world more advanced and governments wakes up an hour later to try and stop us.
The average person is the building block, while Central banks, politicians, and Wall Street are the parasites.
As you can see, before 1971, the debt to GDP ratio was normal.
Hardly any country on the planet has a debt/GDP ratio less than 40% today, as the U.S. did up until the 1980’s.
The U.S. was quite healthy for a long time, but from 1980 to 1995, and again from 2008 to present day, the ratio has dramatically grown.
Trump’s administration is betting on the workforce. 200 million people work in today’s U.S. job market, and all of them have seen tax cuts.
Now, they’re starting to see their wages gradually improve as well.
Living in the U.S. is expensive. In fact, it is a $50,000 a year admission fee, if you calculate expenditures and divide them by the number of citizens. But, this amount is more than the average salary. In a debt-free economy, every person, who wishes to enjoy life in the U.S. should caugh up $50K in annual taxes to pay for the Federal budget – what a horror show.
The U.S. lives well above its means; it has fostered the wrong habits when it comes to savings, and it will now see a giant bubble in stocks and with real estate, only this time the biggest loser will be bonds.
The “Everything Bubble” will send stocks soaring from here by 30% to 50% before the top is finally blown in 4-6 quarters from now.
Right when the boomers withdraw money from the stock market, the bubble will pop.
The “Everything Bubble” will not include gold and commodities. The real bull market for natural resources will commence when the world sees that Asians are the primary buyers of U.S. stocks, since millennials are tapped out or are unwilling to invest in stocks.
Asia’s dominance will force investors to shift to
It’s not time yet, but as I see it, stick to your guns.