The truth is a beach ball. You can spin it, distort it, ignore it, or push it under the water. But it has a way of popping back up.
April 5, 2016
The truth is a beach ball. You can spin it, distort it, try to knock it out of the way or shove it under the water but it will always pop back up. That’s why the talking heads of the MSM generally just try to ignore it. But it’s there. It persists. It makes itself known.
Today let’s look at five recent examples of how the MSM had to admit the truth about this phoney-baloney fantasyland economy.
1) The Fed caused 93% of the rise in stocks since Lehman
The extraordinary 7 year bull run in the Dow and S&P (complete with the best quarterly comeback since 1933) is a central bank created bubble that rests on no actual economic fundamentals.
In fact, as I noted in a previous article:
This point is not even controversial. It has been the universal consensus of institutions ranging from the Bank for International Settlements to the Official Monetary and Financial Institutions Forum, and from OECD officials to former Fed Governors and even Alan “Bubbles” Greenspan himself.
Well, add one more admission to that list. And this time it’s quantified. Yahoo Finance just published an article admitting that fully 93% of the gains in the stock market during this bull run are directly attributable to the Fed’s interventions in the market.
Now to be fair, there is no modern era in which the markets have not been driven by hope and change of some sort or another. In fact, the economist behind this latest analysis–Brian Barnier of FedDashboard.com–has identified the main drivers of equity market growth going back to 1950, and none of those drivers is “increased productivity” or “growing economic activity.”
Still, that the Fed has driven more than 9/10ths of the recent stock growth is a phenomenal thing for the MSM to so blithely admit. They are the ones, after all, who generally tend to focus on the stock indexes as a bellweather of the economy. So it only stands to reason that if the stock bubble of the last decade has all been a central bank generated mirage, then the economic “recovery” itself is a mirage, right?
“But it’s not just equities!” the savvy reader will say. “What about the commodities rally?”
Funny you should mention that, actually, because the MSM also just admitted that…
2) The commodities rally is based on nothing and will soon collapse
Everyone knows that oil prices began plunging in 2014 and have only recently pulled out of the tailspin. But the oil rout was only one part of a greater commodity rout that has happened in lockstep with the global slowdown in trade in recent years. This great commodity plunge has taken its toll on everything from potash to copper to iron ore to mining stocks to banks to the economies of resource-exporting nations like Australia, Canada and Brazil.