By David R. Young as published on TheBrennerBrief.com
Look everyone! The stock market on Wall Street is hitting all-time highs, and the largest transfer-of-wealth scheme in history is building momentum. The fundamentals of economic success, if not forgotten, are all but ignored as money vomits from the gaping mouth of the Federal Reserve carnival. With its flashing lights, roller-coaster ups and downs, and the grand prize winnings for those who participate, the mainstream media pitches to the crowd to “step right up” and prepare to lose everything.
Stop – just for a moment – just for a bit of sanity, and take a few minutes to review the seemingly outdated fundamentals.
The free market is a system of exchanging products and services. Grow some wheat, or manufacture a stove, and sell it – then use the profits to buy items you need and want such as food, transportation, etc.
The barter system is a direct exchange system, or a product for a product. It is the most basic economic form, and when money fails, this is the system a community falls back on.
Capitalism is not the free market. It is a system of investing money to “produce” more money. Participants invest dollars into an activity which produce goods in order to obtain a share of the profits.
Capitalism cannot exist by itself. It feeds on a thriving free market. An “economy” based on an exchange of money for money’s sake – as glaringly exists in the stock market today – produces mirage-like wealth that can and often does disappear in to thin air, leaving worthless paper in your hand.
The stock market is a system of “middle men” between you and your investments. These middle men are always chasing fresh rumors looking for the jackpot. Therefore, they can be manipulated by false information, false reports and false statistics. On April 23, a hacker on the AP Twitter account reported the following: “Breaking: Two Explosions in the White House and Barack Obama is Injured.”
The false report caused a 1 percent drop in the market place within a minute.
If a plummet instantly follows a single tweet, whether it’s a hoax or not,
imagine what happens to your investments when a real disaster happens. This episode is evidence the system is rigged to collapse before anyone can act to remove their money.
Since Sept 2012, the Federal Reserve has been producing dollars non-stop and is flowing them into the stock market. Profits from the Fed are replacing profits from production. A currency detached from something that gives it value, such as gold or production easily loses the trust necessary for people to use it. This is the real danger of the current stock market surge.
The American dollar went from a gold-based currency to an oil-based currency in the 1970s. Internationally, it is known as the Petro Dollar. All countries have bought U.S. dollars to purchase their oil.
Because of the U.S. debt and failure of our government to take action to reduce it, the dollar is losing its position as the global currency. Many countries have recently signed treaties to buy and sell oil bypassing the U.S. dollar.
The debt, the faltering position as the global currency and the Federal Reserve printing billions of dollars at a mad – no, psychotic rate, all lead to one eminent conclusion: other countries no longer trust the dollar and are dropping it. The American people will be the last to know. This is not just a concern of inflation – it is gingerly being referred to as hyper-inflation, in other words, a collapse of the dollar.
The stock market is being propped up with stimulus dollars to grab your attention and your money. At some time in the near or not too distant future, the stock market will collapse, wiping out the wealth of anyone who gets swept up in it; but that’s just the start.
Next, the dollar will be dropped as the world currency. For those who are lucky enough to get out of the stock market before its collapse, they will suddenly find not only the wealth gained from the stock market wiped out, but their savings will be gone as well.
It’s a losing proposition any way you look at it. It’s going to hurt no matter what you do. But, look again at the fundamentals above. Production is the basis of a real economy. It always was, and always will be. Stop buying into the quick buck. Invest in production. If you’re affluent, don’t waste your money; pay off your debts and invest your money to make it more possible to produce something that other people need such as food, energy, some service or product. The free market economy is the only basis of any real economic success and security. Dollar or no dollar, your value to your community is based on what you can produce, which will assist others in their lives. Nothing else will give you more opportunity to succeed.