05/30/2019, Los Angeles
The S&P 500 double-topped in September of 2018 and by December it had dropped more than 20%. Last month, the S&P double-topped again and since then it’s been one step forward and two steps back, so no one should be the least bit surprised if it’s down at least 20% before the end of July. But it may be quite possible that last December’s drop was just a shot over the bow, warning of the dangerously precipitous and brutal drop yet to come. There is certainly no shortage of pundits and expert analysts claiming that the stock market is dangerously oversold, companies and banks are dangerously over-extended, and Americans, in general, are in greater debt than ever before, all set to converge and culminate in a catastrophic economic and market crash, rivaled only by the Great Depression.
There appears to be no shortage of economic fires capable of igniting the roiling economic, political, and social tinder, currently basking in America’s summer sun. In spite of all the indications, comparisons, and warnings, the greatest danger America faces today might very well be the extensive and relentless effort that both the government and media are expending on not immediately and unequivocally identifying and attempting to reverse the “singularity” responsible for ALL of America’s current economic, political, and social maladies. The black hole, or all-consuming singularity I’m referring to, is the broken link between productivity and wages. Prior to 1971, when the economy thrived, the dollar thrived and along with it, middle class workers thrived.
When President Nixon detached the dollar from the gold standard, wages no longer benefited from the gains in economic productivity. It was a double whammy because not only did wages stagnate, but dollar value began a trend of constant recession at the same time. To try and stay ahead of inflation, workers could either work more, to make up the difference, or BORROW! That’s right, just to make ends meet for basic necessities, it became necessary for the average worker to borrow and U.S. consumers are now more than $13 trillion in personal debt, by way of loans, credit cards, and student loans. Meanwhile, corporations have done the same, as well as our government to the ever-increasing tune of $22 trillion. The process gave Wall Street a blank check and Main Street workers have been paying the price ever since.
A black hole provides the perfect analogy to describe what is consuming our economy and will prevent America from ever being great again, until it is identified, analyzed, and neutralized! A growing sense of hopelessness is one of the visible symptoms and it’s becoming more and more prevalent as the American middle class, once our country’s most politically and economically stable group, has slowly been consumed by invisible inflation and debt. The social, political, and economic fabric of our country will be sucked in and consumed if we don’t take action NOW! Continued ignorance will insure our complete failure. Physical precious metals are one of the best asset protections we can utilize, while creating and applying whatever steps are necessary for a solution to the core problem. Call the professionals at American Bullion for assistance at (800) 653-GOLD (4653).
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.