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We have never seen a better year for stocks in all of U.S. history. Just five days after Donald Trump entered the White House, the Dow Jones Industrial Average hit the 20,000 mark for the first time ever. On Monday, the Dow closed at 24,792.20, and there doesn’t seem to be any end to the rally in sight. Overall, the Dow Jones Industrial Average is up more than 5,000 points so far in 2017, and that absolutely shatters all of the old records. Previously, the most that the Dow had risen in a single year was 3,472 points in 2013.
Yes, I know that it may seem odd for a website that continually chronicles our ongoing “economic collapse” to be talking about a boom in stock market prices. But of course there has not been a corresponding economic boom to match the rise in stock prices. This artificial stock market bubble has been created by unprecedented central bank intervention, and every previous stock market bubble in our history has ended with a horrible crash.
Money manager Peter Schiff correctly predicted the financial meltdown in 2008.
Now, 10 years later, what does Schiff see today? Schiff says,
“I predicted a lot more than just the stock market going down back then. I predicted the financial crisis, but more importantly, I predicted what the government would do as a result of the financial crisis and what the consequences of that would be because that’s where we’re headed.
The real crash I wrote about in my most recent book is still coming…
The Biggest Sinners in the Dow.
All 30 companies in the Dow Jones Industrial Average have now reported earnings for the third quarter. As required, they reported these earnings under Generally Accepted Accounting Principles (GAAP). These standardized accounting rules are supposed to allow investors to compare the results of different companies. But that’s too harsh a fate for many of our corporate heroes, and so they proffer their own and much more pleasing accounting strategies – as expressed in “adjusted” earnings and “adjusted” earnings per share (EPS).
Of the 30 companies in the DJIA, 14 reported “adjusted” or “non-GAAP” earnings in Q3 that were significantly higher than their GAAP earnings. Total “adjusted” EPS of these 14 Dow components exceeded their total EPS under GAAP by 26%! Nice work!
In a quarter in which the world was – supposedly – growing on all cylinders, and in which the S&P was making record high after record high, one central bank was quietly buying everything in sight….
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Apparently, having nothing else to comment on this morning, moments ago the president tweeted that as of this moment, the S&P just hit its latest, 40th YTD, all time high in 2017.
“RECORD HIGH FOR S & P 500!”
RECORD HIGH FOR S & P 500!
— Donald J. Trump (@realDonaldTrump) September 29, 2017
Putting this declaration in context, in April 2016, Trump was feeling increasingly bearish about stocks. He told The Washington Post that they were overvalued and that the strong data that showed a healthy economy were essentially phony.
“I think we’re sitting on an economic bubble. A financial bubble,” Mr. Trump said.
By September, he was arguing that the Federal Reserve was propping up a “false economy” that is actually weak.
As Americans place a record amount of bets into a stock market that continues to rise towards the heavens, few realize how much the Dow Jones Index is overvalued. While some metrics suggest that the Dow Jones Index is very expensive, there is another indicator that shows just how much of a bubble the market has become.
If we compare the Dow Jones Index to the price of oil, we can see how much the market has to fall to get back to a more realistic valuation. For example, if the Dow Jones Index were to decline to the same ratio to oil back to its low in early 2009, it would need to lose 14,500 points or 65% of its value.
In this extensive interview with USAWatchdog.com’s Greg Hunter, Charles Nenner, renowned financial and geopolitical analyst, has been saying for a few years that “there would be no market crash until the end of 2017,” and “if people were not positioned correctly, they could lose everything.”
It’s nearing the end of 2017, and Nenner says, “I think we are there already. . . . We, personally, are totally out of stocks at this point.”
So, where is Nenner telling people to stash their cash?