This article completes the economic trinity titled: ” Financial Common Sense.” Part one in this trinity dealt with the formation and bursting of the dot-com bubble of 2000-2001. Part two dealt with the formation and bursting of the equity-housing bubble in 2007, that brought the 2008 depression.
FCS-Part 1 and FCS-Part 2 are factual, accurate, and historically correct in all details. This article, FCS-Part 3 is a projection of the author’s financial analysis based on: 1) Economic data, 2) Financial data, 3) worldwide equity market data, and 4) common sense politics. Readers are urged to keep two important facts in mind when reading this article. FACT 1 – The smartest economist in the world can not accurately predict the closing prices of equity markets just 24 hours in the future. FACT 2 – This article is written for the purpose of academic discussion and the information and projections contained here should not be considered as a recommendation to buy or sell any specific security in any equity market.
The projections contained in this article are based in part on two principles. PRINCIPLE 1- When the Fed takes actions, the actions are usually not in the best long term interests of the American economy or the American People. PRINCIPLE 2 – When the congress and the president spend our tax dollars, their actions are usually not in the best long term interests of the American People or the American economy. The main focus on spending our tax dollars is motivated by the political Machiavellian interests of our two corrupt political parties and usually is not in the best long term interests of the American People.
The U.S. economy has been weakening each year since 2000. During the past thirteen years, real GDP growth has averaged about 1.7 percent/year. The “growth” in net new payroll jobs has been negative during this period. Real business investment in plant, equipment, and technology has been less than 1 percent each year.
Yet with all of this bad news, I project that the U.S. Stock market will continue the bullish move upward and 2014 will be a year with more new highs in the S&P and the Dow. The Nasdaq is sure to follow. ( Editor’s note: The mathematical analysis was completed on the S&P and the Dow. ) Many individuals might ask: ‘ How can you make statements like these when the data does not support such statements? ‘
The market does not trade on factual data, but data as analyzed by investors. Also, the federal government surpresses free market capitalism in order to promote the interests of some Americans while harming the interests of other Americans. The one individual in the U.S. who has the greatest ability to manipulate economic data, interest rates, and market beliefs is the President, Barack Obama. The president can do this both directly and indirectly by appointing certain individuals to multiple offices in the federal government. President Obama has a clear vision of what he wants in 2014. Mr. Obama’s greatest wish is that the Democratic Party can gain control of the U.S. House of Representatives in 2014. Mr. Obama also wants to keep control of the U.S. Senate. The Republican Party wants to keep control of the U.S. House and take control of the U.S. Senate. American’s will decide on November 4, 2014. The entire U.S. House is up for election and at least 33 seats in the U.S. Senate are up for election.
So what does this have to do with the U.S. stock market? It turns out that more than 98% of all monies collected by our two corrupt parties is collected from the super-rich, the very rich, and assorted special interest groups. It turns out that the super-rich and the very rich are happy when the stock market is increasing in value. Both republicans and democrats want the rich to be happy so they will donate obscene amounts of money to their respective campaigns. Winning a U.S. House seat is expensive. Winning a U.S. Senate seat is extremely expensive. So, it is in the best interests of members of congress to keep the stock market moving higher. Also, keep in mind that President Obama is close friends with three multi-billionaires. Obama’s billionaire friends include: 1) George Soros, 2) Warren Buffett, and 3) Penny Pritzker.
I project that the market will continue to move upward through October, 2014. My analysis projects the S&P 500 to reach and/or exceed 1,982.00 in 2014. My analysis projects the Dow to reach and/or exceed 17,773.00 in 2014. Unfortunately, these great numbers are built on manipulated data and a new form of economics often called bubble economics. When bubbles form, they always burst. I additionally project that 2015 will bring a depression that will make the 2008 depression look like a minor downturn. Remember, President Obama has little incentive to keep the economic bubble expanding after the November 4, 2014 election. After the election, Mr. Obama will be busy redistributing monies from the working-middle income citizens to the poor. The working-middle income citizens just can not catch a break. As for the super-rich, puts, short selling, and currency trading will as always make the super-rich even richer.
R. Van Conoley ( Editor’s note: Many of the ideas in this article grew from the writings of Richard Love. Mr. Love was employed by U.S. Intelligence and published a book about the ” Four year political cycle theory of presidential elections.” To the best of my knowledge, this book is no longer in print and is not available to American citizens. )