MARKET MELT-UP

In the many articles I’ve written for the Trends Journal, there has been one common theme: The stock market is going higher.
Just last week, the market hit a new record high – and it’s not done yet.
Despite what the mainstream media outlets and some politicians are trying to sell you, one fact remains: the U.S. and nations around the world are in the midst of an economic collapse.
Where’s the proof?
Simple. In the U.S., the rate at which cash is moving through the economy has now hit an historic low. Keep in mind that the issue of “cash moving through the economy,” also known as MONEY VELOCITY, has been hovering at near-historic lows since 2008 (see below chart).
 

So, throughout Obama’s and President Trump’s tenure, the talk about an “economic recovery” has been a 100 percent falsehood. You cannot have an economic recovery or “boom” without the money velocity moving higher.
 Regarding the money velocity, in every recession since 1960, we have not had a lower number than today. (In the above chart, recessions are the grey shaded areas.)
Despite being in an economic meltdown, the stock market seems to be defying gravity. The reason for this is also simple: the stock market is NOT the economy! Yet, the market is used as a distraction mechanism by politicians who continually point to the stock market hitting new highs as a sign of a “booming economy/V-shaped recovery.”
Every effort both imaginable – and unimaginable – is being made to keep the stock market propped up. Backdoor corporate bailouts via the Federal Reserve buying corporate debt are indeed creating zombie companies.
The promise of mass debt expansion is the only fuel propelling the stock market today. Since 2008, epic debt acquisition and issuance by world central banks has not just kept global markets on life support, it has provided the momentum for their massive moves higher. This phenomenon continues today.
In the U.S., it seems the worse the economic news gets, the higher stock markets go. The reason for this is because the Federal Reserve is determined to issue more debt on an unprecedented scale.
As an example: this past March, the Fed’s balance sheet stood at $4.1 trillion. Today, it has ballooned to over $7.1 trillion. The higher the Federal Reserve inflates its balance sheet, the higher stocks will go.
Nothing matters to the market more than the promise of a multi-trillion-dollar debt expansion coming in short order. This new debt expansion cycle will eclipse anything ever seen before, and it will continue to propel the stock market to new record highs.
It’s defying gravity now… but the high can’t – and won’t – last.
by Gregory Mannarino, TradersChoice.net