When Brodheads took New Amsterdam in 1664 and called it New York, Wall street was a wooden fence that kept the Indians out.
Demographic trends are king in a modern economy. In 1982, the lead baby boomer turned 37 years old. In 1992, the boomer turned 47. There were baby clothes to buy, and new houses. The cell phone was replacing land lines. The computer and copy machines were replacing antiquated information technology. The rise of the information age , just as the rise of railroads created massive wealth. At the end of the railroad boom came the inevitable economic down turn. The same would happen with the information age.
In 2002, the boomer turned 57. In 2012, the boomer turned 67. In 2022, the boomer will turn 77. Today, 300,000 baby boomers leave the work force for entitlements every month. 3.6 million boomers per year for the next 20 years will leave federal revenue generating jobs for entitlements. To date, the Obama era is not even replacing boomer job attrition. A good Obama month might be 200,000 new jobs created a month. In reality, this is a net loss of 100,000 jobs. A growing population in itself creates jobs. But where are the utter hundreds of thousands of jobs required and created by demographic trends?
America’s population growth is .7% a year. With a population of approximately 320 million, this equates to 2.2 million new folks each year or approximately 200,00 new folks available for work every month. We can cut this number by 1/3 because some women are stay at home moms. If we add boomer job loss of 300,000 a month, we now see that it takes at least 450,000 jobs created a month to maintain existing Federal revenue streams. This number is not being achieved, hence, Obama taxation doctrine seeks to attack the so-called rich and now, off shore corporate profits. In lieu of cutting big unsustainable government, and incentives for repatriation, Barack Hussein Obama prefers taking wealth.
As it is, there are approximately 90 million people that do not participate in the work force.
Many of us remember Y2k, dangling chads, the dot com bust, 911, and the housing bubble. We saw the Nasdaq drop from 6000 to 1200. We saw as the phone book went the way of the dodo. We saw our businesses lose customer base. We stood by as our 401ks were gutted and then gutted again, while Wall street traders made millions. We saw how Greenspan’s FED rate created a housing bubble.
Barack Hussein Obama monetary policies have created the same economic climate as did Bush. During the Bush 43 era, the only prop the stock market received was lowered interest rates. Instead of 9% rates, Americans enjoyed 5.5% mortgage rates.
During Barack Hussein Obama’s entire presidency, the stock market has been propped up by even lower prime and mortgage rates. In addition, the FED engaged in open-ended quantitative easing that has allowed stock’s to grow beyond P/E ratios of 30 to 40. The FED has pumped a trillion a year into toxic asset repurchase and bond repurchase. Low mortgage rates have propelled the housing market into 2006 prices once again, while wages stagnate.
Janet Yellen, the Chair woman of the FED is dangling a FED rate increase for June 1st. The Federal government is hoping that housing investors will sell and then have to pay Obama’s 24% capital gains rate. The is like getting that last from the revenue turnip. Then , once interest rates increase, housing prices will plummet, and there will be a run on the stock market. All of this because the federal government lost 25% of hard federal revenue in 2008 . But instead of reducing the federal leviathan, Barack Hussein Obama raised taxes and put the petal to the metal on Federal spending.
So, the question is when will Obama’s house of cards economy come tumbling down. In addition, who will inherit his monetary mess? As it is, it will cost the American tax payer $500 billion a year forever just to pay for Obama’s $10 trillion national debt contribution.
The S&P 500 average P/E ratio suggests that it is over priced by 25%.
Hmm, is the Dow and the Nasdaq also over valued?
If Yellen raises the FED one percentage point what will happen?
Why aren’t our so-called presidential worthy Republicans talking about the economy stupid?
We do know that Ben Carson knows zip about international relations.