Dow 30,000 and Beyond

New all-time highs on Wall Street tell a different story than the mainstream media

The Dow Jones Industrial Average index just reached a milestone valuation 28,000. Thats a pretty big deal in the investing world. Its never, ever happened. Consider that on November 9, 2009, as the country was struggling to emerge from the Great Recession, the Dow gained two percent and closed at 10,226.9. It has almost tripled since then.

What gives? Dont trade wars, presidential impeachments and record national debt levels matter to investors? The answer is, “they do and they should,” but not always. Much to the chagrin of the mainstream press which loves to focus on the negatives, it greatly depends on other external factors.

Exaggerated Problems

Thats why Wall Street, with all its wisdom and insight into nations economic and political machinations, thinks the trade war with China, the possibility of impeaching the president and the national debt—three really big potential impediments to a healthy economy—dont really matter that much after all. Much of the rest of the country doesnt think so, either.

They have a point. By many measures, the economy is doing phenomenal; better than it ever has. Thats an undeniable fact. Not only is it performing at record levels, but its leaving most of the worlds competition in the dust. This reality is reflected in the stock market. To paraphrase Mark Twain, “the news of the American economys descent into recession has been greatly exaggerated.”

Thats not to say these very fundamental problems wont negatively impact the American economy. They certainly will but at an uncertain date in the future. Not right now.

Look at the trade war with China. Conventional wisdom peddlers in the media warned us consumer prices would go up from the tariffs imposed on Chinese goods. That hasnt happened. In some cases, China is eating the costs of tariffs. In others, fewer goods are coming from China. Nonetheless, U.S. wages and employment are both up.

Why? China has determined that eating some of the costs is worth it as long as it keeps its people busy working in the factories. Making less money is preferable to facing millions of unemployed people getting busy doing other things, such as rioting in the streets of Beijing. So far, so good.

As for the impeachment inquiry and all the political theatrics surrounding it, at this point, the country isnt that impressed with it all. Maybe its because the American people are too busy working or shopping, or both. Thats what happens when there is record-low unemployment. When more people are making more money, they feel better about the economy and their future. When they feel good about life, they spend more, invest in stocks, and voila! The Dow hits 28,000.

And the national debt? Its recently passed the $23 trillion mark. Thats an extraordinary figure. In fact, its inconceivable for any human being to really grasp its magnitude.

Investors Ignore What They Cant Fix

And thats the answer as to why it doesnt matter to investors. The vast majority of Americans dont have the intellectual bandwidth, much less the time or inclination, to dwell on such an obtuse topic and unapproachable number. Even those that do are fools to worry about it because they cant do anything about it.

Lets face it, everybody understands that too much debt gets you into trouble. But when it comes to the Federal Government, theres a disconnect. How many trillions of dollars of debt is too much? How many years of warnings and debt ceilings and other red flags has the American public endured?

And where has it all led? To more of the same.

At some point, people just want to live their lives. Federal Reserve and other policies seem to be intangible factors, and really dont touch them unless things are going badly. In that instance, though most likely they still dont understand it, it gives them something to yell about. But things arent going badly. Thats probably the biggest factor of all.

“America First” Works

Whats more, our national debt is projected to reach almost $34 trillion by 2029. And then what? Will the rest of the world refuse to use dollars? Maybe. But maybe not.

What would they use instead? Chinese yuan? Japanese yen? Euros? Rubles? The answer is probably “none of the above.”

And no, the Chinese yuan isnt an alternative when one considers the monstrous debt theyre hiding—somewhere in the neighborhood of several tens of trillions of dollars worth and growing—with only about half the economic output, if that, of the United States.

The Chinese economy is contracting, Chinas abuses economic partners and has a legal system antagonistic to foreigners. Its difficult to see how the world would suddenly fall in love with the yuan.

Thats not a flippant response. Rather, it simply reflects the fact that at the moment, theres no valid substitutRead More – Source