economic collapse, COVID-19, 2020, national debt
Preparedness

Economic Collapse: Stock Market as an Indicator

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The severity of the economic impact from the COVID-19 pandemic is just now being recognized – and in a historical timeline just getting started. So far there have been three Federal initiatives totaling well over $2.3 trillion dollars(eventually to total between $4-$6 trillion).

The National Debt now sits at $24.5 trillion dollars.

The reality of what is occurring and the long-range impact to the economy is catastrophic. Thousands of businesses have closed their doors, never to reopen. Thousands more are struggling and their fate remains questionable. Millions of American’s have lost their jobs and countless more will.

The Federal government’s response is anemic at best. The $1,200 stimulus check that many are receiving pales in comparison to their lost revenue. Federal unemployment dollars will certainly be a help but is a short term stopgap measure. The bottom line is there are massive layoffs, businesses closing, inflation has started and many of those businesses and jobs will not be coming back.

Far too many in the mainstream media and elsewhere are using the stock market as an indicator for economic health. This is an effort based on a falsehood – which is the value of the stock market itself. Don’t get me wrong the economy was doing much better thus the stock market deserved to be elevated, but not nearly to the level it was – or is.

Stock Market/DOW Level

Look at the image at the top of this post. About one year ago the DOW was sitting at around 23,500. Today – the DOW sits at around 23,500. The market did rise at one point to over 29,000.

Should the market be at the level it is right now? The answer is simple: No.

Let’s compare December of 2018, to April of 2020:

12/2018:  DOW – 23,500 estimated

  • US economy booming
  • Record low unemployment rates for all Americans including African-Americans, Hispanics, and women
  • Wages trending upward
  • Manufacturing sectors reporting growth and expansion
  • US/Mexico/Canada Trade Deal just signed in November
  • Largest tax overhaul in U.S. history implemented in 2018

04/2020: DOW – 23,500 estimated

  • Trillions being added to National Debt(total amount unknown)
  • Worldwide pandemic causing sickness to over 2 million and 160,000 deaths
  • United States cases well over 700,000 with nearly 40,000 deaths
  • U.S. unemployment rate estimated to be between 13%-20%
  • Shelter-In-Place stays ordered across the nation
  • Tens of thousands of businesses closed
  • Many major food producers shutting down
  • Economic outlook in the United States, and the World = dismal

So much more could be added to the 04/2020 list but I believe the point has been made.  The stock market has already dropped from its high of over 29,000 and should be down closer to 14,000. The reality of current economic conditions is not reflected in the market – yet.

What Are We To Expect?

Over the coming month’s we are going to hear a lot of positive things coming out of government. This has to happen to denote hope and quell panic. Consumer confidence is extremely low and is a contributing factor to any “recovery” that may occur. What might be considered a recovery is really a pause for what is to eventually arrive.

Am I right? Does this make sense? Is everything going to be fine and return to normal?

Hey – what do I know? I’m just an unemployed writer with a propensity towards reality.

Take care all.

Rourke

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16 Comments

  1. Borderreiver says:

    Rourke, you are correct once again. Glad you seem to be handling life’s frost heaves with aplomb. One of the other fun things coming down the pike will be this summer. For whatever reason this summer is going to be the hottest in recorded history and there will be thousands more people at home running air conditioning. The grid is old , and in past years rolling brown-outs were used to alleviate pressure on it. This year could cause the grid to fail because so many people will be home instead of at work. Glad you’re back at it, thanks for giving us a forum. Lots of great ideas to be found here.
    If its okay to put in a plug for a small business, check out Comfort Foods in Albuquerque, NM for some kick-a$$ dehydrated green chili stew and red enchilada stew. It is spicy but good. Nice change for the SHTF pantry or now. Call them and they talk deals. No I’m not affiliated or sponsored, just like their stuff. Send an email and I’ll give you more info.

    Keep up the great work and keep your powder dry.

    Reply
  2. Oren says:

    This is only the tip of the iceberg. China, in my opinion, has launched a biological attack on the Western world…very successfully. This was done in retaliation to Trump hitting them with sanctions which drove their economy into the ground. Now, ours is there. Regardless of the how, we now have multiple Congressmen calling for retribution. We aren’t the only country calling for this “Day of Reckoning”. The UK has also gotten on the bandwagon, and I suspect others have also. Now think about it. A group of nations who have been ravaged by the Wuhan Virus comes together and puts together program of tariffs and bans on products from China. This group neither buys nor sells to China. This group penalizes all companies who left their shores to manufacture in China and forces them to leave China and return home. Banking is shut down therefore denying China access. As this is put into place, soft cyber attacks begin.
    Now the question is, do you think China is going to sit down and accept this? I don’t. I think it needs to be done. I think China as well as NK need to be put into a box labeled “Pariah Nation”. But we better be ready for the repercussions. Of course this will only happen if we re-elect Trump. Which I dearly hope we do. But, if all this comes to pass, we had better be ready. I’ve already begun opening up more space for my garden. I’m looking at live stock other than Chickens. I’m trying to get as self sufficient as possible. I think we will need it.
    If only the toilet paper shortage will ease.

    Reply
  3. JBernDrApt says:

    Thanks and your message is well taken JR. As you know with my health condition not much I can do but try and emphasize to my family the need to prepare, and to get all the information available. I have been preparing for a long time and want the kids and grands ready and for them to take care of my wife when it hits.
    Thanks for this additional information, this site which allows us to share and learn and the recommendations posted here. Thanks to fellow members who get involved and share. Praying for you to find the perfect position for you. I trust you are doing well.
    – Keep Looking Up

    Reply
  4. rc says:

    The market is always fluid. It’s based on mostly speculation anyway. The big thing is the national debt. Good luck on getting that down anytime soon. Will bounce back but probably at a slower pace which is good for the economy.

    Reply
  5. CaptTurbo says:

    I used this crash to add to my holding of gold mining shares and to open new positions in gold miners. It’s hard for me to decide which threat is more dangerous, the Chicoms or the Demcoms. Just kidding. The leftists within this nation are by far the largest threat we face.

    Reply
    1. goinggray58 says:

      No .. it’ snot kidding .. it’s and apt point.. both are opportunistic bottom feeders that use crisis to their advantage for control with no tolerance for any other opinion. Same as Muslims to a degree.. albeit one is a religious ideology and the other an atheistic ideology. IMO
      GG58

      Reply
  6. John Gault says:

    No the stock market is not always (I might suggest rarely) a good measure of economic health. What is good for the markets is often diametrically opposite of what is good for middle America.

    The national debt has little meaning anymore. It’s there but serves little more than as a reminder to our own economic fecklessness. Yes ours, we put these idiots in office and rarely punish them for their misdeeds. It’s also a reminder to the Federal Reserve that now high interest rates alone will put our economy on its knees.

    Reply
  7. John Handcocj says:

    I personally think the market is reflecting what the majority of people are thinking about the future of our economy, the trade deals haven’t even began to be felt yet, They said it would be around election time before you felt the effects of the North American trade deal, ( why do you think Nancy put it off a full year? She knew it was fantastic and didn’t want to run in a election where the people felt it’s affects.) China trade deal was how many months after that, all the economic articles I’ve read say it takes roughly a year for these kind of large changes to start trickling down, hell i have no ideal that’s way above my pay grade, but if their right we have even seen its effects yet! I personally think that many of those jobs are still there (yes they will be slow to pick back up, but I think your going to see a lot of people going out, a pent up going out a spending boom as people are “released” from their captivity.) I think by mid June the market will be back up to around 26,000 and a return to near 29,000 at election time. ( Do I think that is because everyone will be back to full strength and work, the simple answer is no, in short it will be because we are hurt but we are still stronger than everyone else which means a lot of “foreign” investing will prop us up to even stronger than we are, but in my humble opinion “where the market goes job numbers soon follow” as far as the national debt, who the hell knows?? I remember guys ten years ago when we crossed over 12 trillion that this was it were done now our goose is cooked, yet the world 🌍 still spins and the banks are still open. I will say this, although we had a 6 trillion dollar bailout (in which I do not agree with) about 4.5 trillion of it is loans, will businesses fold and not pay it back who knows? Obama took the debt from 11 to 22 trillion in eight years, (he tried to destroy us through debt) Trump dealing with the 100 year plague has only added 2 and change trillion to it in going on four years, he has said he is going to cut all government with the exception of the military by 1/3 in his second term, plus he hasn’t even began to go after our so called European allies in trade deals “yet” I think this man has and will so much more good for this country that because of him we are very safe from a economic collapse any time over the next 7 or 8 years bar another plague or war.

    Reply
  8. ralph k says:

    Unfortunately I think the worst is yet to come. Massive unemployment coming yet still,
    and lord knows how many bankruptcies to follow of small businesses, which constitute
    ~75% of employment. None of this has been reflected in the news cycle yet. And the worst thing in my estimation is the psychological damage done on a massive scale which will crater peoples prior spending habits. Folks are going to be much more conscious of dollars flowing out of their household. This was the ‘reset’ as far as I am concerned. When the future is unknown or being feared, no amount of handouts is going make people resume the past indulgences.
    The entire construct is a power grab. And I believe it has a lot to do with destroying Trump, Brexit, MAGA no matter the cost. TPTB see the handwriting on the wall. All because ‘she didn’t win’ in 2016. Global warming was losing its mojo, so another issue was ginned up to scare the populace. The monetary system is going to fail, they know it and are setting the stage for another system which they have even more control, such as the abolishment of paper currency and with it, privacy, ease of taxation (bank accounts debited or deleted with a click) for all the popular socialist agenda money schemes. Yes, we will all be equal…equally poor, monetarily and spiritually. The displays of arrogance and overreach of the state in the name of ‘its for your own good’ are fast and furious in every news cycle. Just look at the governors of the the blue states and all the bs they are promoting, all under the color of the ‘law’. Time is coming to just kick over the card table like in the old westerns. Spicy times they are a coming. Keep frosty and keep safe.

    Reply
    1. CaptTurbo says:

      While I love the optimism displayed by John Handcocj, my appraisal is more inline with Ralph’s. I think it’s all about control. A massive power grab to defeat capitalism and the orange man who is doing his best to keep our republic.

      Reply
    2. John Handcock says:

      I definitely agree on your thoughts that this wasn’t accidental, since this first started I couldn’t shake that feeling that something wasn’t right, that this was done intentionally, I’m a true believer that forces work against us everyday and they like you said see the writing on the wall that Trump is doing to much good and undoing to much of their work, but I imagine Trump winning and us keeping the senate with a bigger majority, and taking back the house in 2020, (yes they dropped the ball in 2016 and could have gotten so much more done but think of the deep state that was in our camp, the traitor like stab in the back of John Mcain just to get back at Trump) I think if we have the presidency and congress in 2020 that we will see sweeping changes like we’ve only dreamed about in our lifetimes! That being said I’m fully aware I’m being very optimistic about my opinion here, I still have hope, but I will say this after all the democrats have done and shown over the past two years if we don’t see democrats pay dearly at the election box and see republicans take the wheel in a great red wave I think my faith in politics will be at last at a end, from there I’ll wait, but my time like most I imagine and prepare for collapse and war. With that being said I’d like to think we all hope I’m right, because if I’m not I’d say a third of us are going to be dead.

      Reply
  9. goinggray58 says:

    Our economy has been unable to settle national debt in any meaningful way since 1965, when we left the bimetallic standard. From that point forward, every dollar has not been a promissory note, but only unsecured debt. In terms of stability. I come to you and ask for a loan @ 1%, for 1 million dollars for my business. You expect to get make 10,000.00 in return for allowing me to use the money, over some period of time. As a lender, I would want to know if you default, what assets you have to cover the balance, should you fail. Right? But I tell you.. well I have car loans that are upside down, and unpaid for building, a payroll, and no business until I can reopen. Would you say I was a good risk? Of course not. THAT is unsecured debt, if the loan is granted bay anyone, government or not. In this case WE the taxpayers are the guarantors of the loan. That sound good to you? Moreover, the 6 trillion “injected” (sounds medical and intelligent) into the economy, is exactly that.. Unsecured by any NEW asset. All dollars then become worth less (pun intended), than they previously to the tune of 6 trillion. That is 18% of the total national debt, with no hope of paying it back at all.
    Never the less all over social media people are showing pictures of new guns, clothes, PS4’s etc etc.. I suppose it stimulates the economy, but not locally usually and not in a way that makes them more able to weather the coming fiscal storm. I have received it, but have not nor will I spend a dime that doesn’t make me more able to secure my families future. (not pew related either). If you were not set already.. well you guys were so I’m preaching to the choir.
    For me well.. I struggle with pulling all 1’s and 0’s out and spending on assets.. some I have and some I have not.
    I have upped my game in the critter and energy producing capability, as well as consumables. I think this has the possibility of sucking for more than a few months.. IMO If not fine I’ll donate some to the food bank. It’s not like there won’t be people who need it. “ALWAYS the poor will be among you.”
    We will not get back the country we knew, IMO it will be closer to Stalinist Russia or Nazi Germany, all in the name of security, and safety. RUBBISH! “If you value security over freedom, you shall have neither”.
    I am in the tech industry, and working for an essential company, and am fortunate not to have had any impact on income at all.. so far. That gives me a buffer, but you can bet there will be no industry or individual untouched. YES it was planned, or used when identified.. same thing. Maybe China, but more likely one worldish.. IMO ..not tinfoil really either. Who are our primary two lenders ? China and Japan. How might they collect on debt ? Think about it.
    It’s all above my paygrade to decide of course. While you cannot fight a well armed government, you can become uninteresting to buy time.. I do not hoard, I prepare.
    Prepare deliberately in skills and supplies, my friends.
    GG58

    Reply
  10. NormlChuck says:

    For every dollar that the Federal Reserve prints existing dollars are devalued.The only
    possible result is hyper inflation.When people can’t afford what little food there is,I don’t what will happen.Nothing good.

    Reply
    1. John Handcock says:

      Hell on earth… we must prepare now the end is surely near, I give it 8 years max, I just want to correct anyone who thinks that I think it’s all rainbows 🌈 and unicorns, cause it’s not, I’ve often said this to my very good friend a Rourke, but I forget I’ve not really said it here, so here my thoughts, Trump is buying us time, how long you ask depends on if we get another traitor like Obama or a idiot like bush or maybe a for sale Joe, idk I’m not the all seeing eye, that being said shit will hit the fan in the next ten years unless we’re EXTREMELY lucky and get another equivalent of Trump in 2024… lol I very highly doubt this! The facts are were already screwed and I mean that to the fullest extent! With that said what you see from my comments, my optimism, my hope, that’s just me being THANKFUL! I’ve got that much more time to get ready! FYI most preppers or so called preppers you know today arnt getting ready and it’s my belief that they will be the REAL preppers biggest danger, but that’s a whole other conversation now isn’t it??!!!

      Reply

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