When Pigs Can Fly, the Devil Shivers in Hell, and 30% Gains in Western Stock Markets Will Mean Practically Nothing
With deception in the mainstream financial media reaching new heights regarding the recent rallies in Western stock markets, it’s time to shed some light on this matter. The first rule of building wealth is that your gains have to outpace the rate at which Central Bankers depreciate the currency in which your asset is denominated. Otherwise you end up with more money in you account but no better standard of living. For example, if your investment adviser tells you that his or her goal for you this year is 8% returns, if Central Bankers have depreciated your currency by 15% this year, then fulfilling his/her goal actually results in a 8.2% destruction of your wealth, exclusive of tax consequences.
Even though every investment veteran, sans the most naïve of the naïve, understands that the US stock market has been rigged higher for the past two years solely through free market interference by politicians and Wall Street elements, what if these rigging games continue and the Central Banking/government cartel successfully rigs the DJIA and the S&P 500 higher by another 30%? Those still naively invested in the broad US stock markets should be ecstatic because of the fact that their accounts now hold 30% more paper money, right? Wrong. In 2007, the Zimbabwe Industrial Index soared 545% and at one point, on a 12-month rolling period, was up more than 12,000%! However, Central Bankers in Zimbabwe would probably not care to reveal that the unemployment rate during this stock market “boom” was also an astounding 80%.
But this is the trick that Central Bankers use to fool those that don’t understand how the monetary system works. Central Bankers can actually rig the stock markets to return a greater absolute amount of dollars (or Euros, or Yen, or Pound Sterling or Yuan) and a significant positive return in nominal terms, that in actuality, may contribute nothing to or may even decrease your REAL net worth.