Why does the Stock Market keep going up?
The Stock Market Bubble!
July 1, 2016
Why does the Stock Market keep going up? It goes up because it really has no choice! It goes up because the U.S. Government is corrupt! The U.S. Government is creating imaginary-counterfeit money out of "thin air" with GAAP basis deficit spending. This deficit spending is deferring public liabilities to the future U.S. taxpayers, so the U.S. Government is borrowing an imaginary-counterfeit dollar from the future U.S, taxpayers with each dollar of GAAP basis deficit spending. This is why we have been in a 47 year long bull market in the global stock market. The U.S. Government, with this Ponzi scheme fiscal policy, has been constantly producing imaginary-counterfeit money at an exponentially increasing rate since FY1969.
|Cash Deficit in FY2016
|GAAP Deficit in FY2016
|Unfunded Future Liabilities
|US Unfunded Liabilities (GAAP)
|| $102.7 Trillion
|Total National Assets
Source: www.usdebtclock.org July 1, 2016
As of July 1, 2016, the U.S. Government has borrowed $102.7 Trillion (US Unfunded Liabilities (GAAP)) from the future U.S. taxpayers so that U.S. citizens can buy, build, and consume a lot of stuff we cannot afford. The U.S. Government is borrowing another $15.8 Billion every day (GAAP Deficit in FY2016 $5.75T/365 = $15.8B). That's why our roads are filled with so many cars. That's why the sky is filled with so many airplanes. That's why we have so many nice houses. That's why everyone on the planet seems to have a cell phone. We are buying and building most of this stuff with imaginary-counterfeit money that the U.S. Government is pretending to borrow from the future U.S. taxpayers (See Four out of Five Things in America are unaffordable!).
The U.S. Government is creating a financial bubble of imaginary-counterfeit money (now $102.7 Trillion) which in turn is causing a bubble in all asset classes (See The Oswald Financial Bubble). These asset bubbles are discussed in much more detail in Chapter 6 of my book "USAPonzi".
The U.S. Government is creating massive artificial economic stimulus by pumping imaginary-counterfeit money into the global economy and financial system with a dramatically unbalanced budget. The U.S. Government does not disclose just how much counterfeit money it is creating every day because it only reports its Cash deficit ($0.52T) in its formal financial reporting rather than its real GAAP deficit ($5.75T). This money is imaginary because the U.S. Government just "imagines" that the future U.S. taxpayers can pay for what we are buying with this money. This money is counterfeit because the future U.S. taxpayers cannot pay for what we are buying with this money (See The Theory of Imaginary Money).
The Stock Market goes up because we are making most of our purchases with the imaginary-counterfeit money that the U.S. Government is producing out of "thin air". The talking heads on TV are puzzled by the fact that the Stock Market can go up when the U.S. consumer is not seeing much increase in income. The U.S. Government is subsidizing the U.S. consumer with the imaginary-counterfeit money that the U.S. Government is borrowing from the future U.S. taxpayers (GAAP Deficit in FY2016 $5.75T/322 million citizens = $16,583 per citizen per year). And this GAAP Deficit is increasing exponentially so we tend to get more imaginary-counterfeit money from the U.S. Government each year.
Most U.S. citizens do not get their fair share of this $16,583 this year because the U.S. Government does not distribute it equally. The U.S. ruling class gets some of this money because the U.S. Government is overpaying them. The U.S. social benefits recipients get some of this money because the U.S. Government is overpaying them. But most of this money is going to the U.S. upper class because the U.S. Government is dramatically undertaxing them. This is what is causing the wealth and income gap that is much talked about but not understood.
This problem can only be equitably resolved by the adoption of GAAP Accounting and a commitment to a balanced GAAP basis budget by the U.S. Government.
In order to create a level economic playing field that is sustainable over time and equitable throughout the planet, the U.S. Government must eliminate this fraud and corruption. The U.S. Government must stop cheating the future Americans and the rest of the planet just so it can dramatically enhance the lifestyle of current Americans (See Getting Rich on Borrowed Money)!
USAPonzi is explained in much more detail on my website www.usaponzi.com and in my book "USAPonzi" which is available on Amazon in Kindle and paperback format and on www.usaponzi.com in PDF format.
This is the biggest ($102.7 Trillion) financial fraud ever perpetrated, I call it "USAPonzi: The Ultimate Government Fraud" and "The Biggest Ponzi Scheme on the Planet"!