"A society becomes totalitarian when its structure becomes flagrantly artificial: that is, when its ruling class has lost its function but succeeds in clinging to power by force or fraud. Such a society, no matter how long it persists, can never afford to become either tolerant or intellectually stable..."
George Orwell
This is the underlying message in the young adult three book series The Hunger Games.
Stocks were able to rally higher today, back almost to levels of a few weeks ago, on the better than expected estimate of GDP for the 3Q. That GDP number was dependent on a few one offs like government spending, largely of the military kind, and on a more favorable trade balance.
Excelsior.
The exercise today was very much about proving that the Fed did the right thing in ending QE III, and that there need be no large decline in equities. There is no coincidence in any of this.
There is a natural tendency to be optimistic and to wish for good things to happen. The difficulty is when those steering the ship keep making poor decisions and following policies that are not productive. And this unfortunately is the case today.
What will it take to change my mind? A real media wage that is growing commensurate with GDP, so that domestic consumption can also grow and fuel the real economy without artificial stimulant and welfare spending on corporations and the military-industrial complex.
Fair enough? Until then in my personal judgement the economy is neither self-sustaining nor stable. Yes I understand about lags. And six years is one hell of a lag for those not receiving the beneficence of a trickle down corporatist welfare state.
Have a pleasant evening.
