As the madness of centrally planned everything continues, what is about to happen will shock the world.
The Great Shock
December 10 (King World News) – Gregory Mannarino, writing for the Trends Journal: Let’s start with this…
The world economy is under direct attack, and this mechanism will VAULT risk-on assets (stocks and cryptocurrencies) to heights which will leave most people dumbfounded.
The mechanism here is simple…
We have world central banks colluding directly with (s)elected puppet leaders who are involved in a GRAND DECEPTION…
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THE GREATEST WEALTH TRANSFER SCHEME OF ALL TIME
Here in the U.S. year to date, the S&P 500 has hit NO LESS than 53 new record highs, with the Dow Jones Industrial Average breaking above 45,000 for the first time ever. (And Bitcoin has just recently broken above $100,000).
For YEARS I have explained to those who follow my work that “The Faster That the Economy Craters, The Higher That the Stock Market Will Go.”
Moreover, I have gone on to say that “IF you are a member of the Middle Class, you have a tattoo ON YOUR FACE in the shape of a target, and YOU are being eliminated.”
The root cause of this GRAND THEFT against the world’s middle class, and therefore the economy, stems from the mechanism of artificially suppressed rates. Low/artificially suppressed interest rates are MASSIVELY currency purchasing power negative. (A loss of purchasing power IS inflationary.) However, this same mechanism is highly stock market positive.
Who owns most of the stock market?
The richest Americans own the vast majority of the U.S. stock market, according to Fed data. The top 10 percent of Americans held 93 percent of all stocks, the highest level ever recorded.
ECONOMICS/FINANCE 101
TO HAVE A STRONG ECONOMY YOU NEED A STRONG CURRENCY.
TO HAVE A STRONG CURRENCY, YOU NEED A CORRESPONDING RATE OF INTEREST HIGH ENOUGH TO SUPPORT THE PURCHASING POWER OF THE CURRENCY.
Currently the central bank of The United States, (The Federal Reserve), and The European Central Bank, (ECB), are leading the way to cut rates with more rate cuts coming. From an economic standpoint, rate cuts and therefore currency purchasing power losses are an economic wrecking ball. However, lower rates and a weaker currency are highly risk-on assets positive, meaning you can expect the stock market to go higher along with cryptocurrencies.
CASH SEEKS YIELD
“Cash seeking yield” means that with the promise of low/lower rates, cash will continue to flow faster into stocks and cryptocurrencies, with other assets like commodities underperforming. The current market environment guarantees malinvestment, MASSIVE price action distortions, and worsening asset bubbles.
So, if wealth is being stolen from the middle class, where is it going?
Easy money policy, meaning artificially suppressed rates and therefore currency devaluation, not only vaults risk assets higher as it wrecks the economy, but it also creates what is known as The Cantillon Effect.
The Cantillon Effect. An uneven distribution of newly created money within an economy which leads to redistribution of wealth from the poor to the rich.
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