The Obama Effect

One of Mr. Obama's favorite talking points is that in the month before he took office the nation was losing 800,000 jobs a month and that he, single-handidly, "saved us from a great depression far greater than the "Great Depression."  No financial writer from the main stream press has challenged him on this claim.  This alone is proof that government is now, and has long been, controlling the press. 

"Free press" is a myth.  Even Fox News observes some of the rules of protecting the Federal government.  This is a fact that has been our reality since the time of Franklin Delano Roosevelt who was literally so ill and n on opiates he could not serve, but did thanks to the work of Eleanor.  Woodrow Wilson's wife was our President after he had a stroke in office.  In a practical sense we have had several female Presidents.  

The excuse for government control of the press is always "national security," but that tune does not play well in the areas of financial and employment statistics.  This is where the Obama Administration consistently tells their greatest lies.

The evil side of Washington DC discovered the power of secrecy in World War II.  The truth of the matter is that it was the inevitability of an Obama Presidency that caused the marked collapse of 2008.  The proof is in the DOW 30.

Our oldest, most august equity index is the Dow Jones Industrial Average, the DOW.  It includes 30 leading stocks, which change occasionally as the leaders come and go.  The index is based on predictive tracking value, not tenure and has long been an indicator of the business climate and by design a predictor of things to come. It reliably reflects business and economic conditions to be.

The chart tells us that on April 24, 2008 when John McCain was nominated the DOW looked on him with favor and it went up (A). On June 4, 2008 when Mr. Obama was nominated the DOW started down, with a most dramatic decline at (B) in October as it became clear that Mr. Obama was going to be President.  That conclusion put the market into free fall lasting to the day of the Obama inauguration. 

Never forget that an index is a representation for the thinking of many men and women that own the stock.  DOW list stockholders tend to be people who are in tune, have done well and are no-nonsense investors.  They are not out to "get rich."  They are there already.  They are looking for security and reasonable return.

Glowing expectations from the popular press and bragging about the new Cabinet "smart fellers," "Timothy Geithner is the only man who can do that job!' inspired an upturn (D).  This is quite ordinary as the business world prefers the sunny side, but that fact was soon seen as one without substance.

Fed Chairman Ben Bernanke went to work and the market ballooned, but it came from a flush of borrowed money as it always appears first in the equities markets having come from banks as they invest excess cash in equities now thanks to the elimination of the Glass-Steagal Act thanks to US Senator Phil Graham and Bill Clinton on the justification, "We don't need that old thing any more!"  The Bernanke actions inspired people to jump into the market.  Meanwhile back at the Federal Reserve:

No one wanted to buy the Treasury's new $100,000 "T-Bonds" so Mr. Bernanke printed money anyway, calling it “quantitative easing” birthing a new euphemism to cover a highly illegal crime against our currency creating  enormous inflation the true nature of which has yet to appear in print! 

This practice violates many of the basic principles of economics among them what we call the Genesis Curve. a precursor for which is the Laffer Curve. The elected ruling class knows of the Laffer Curve, the King’s Fifth and “Pharaoh’s one in five” of Genesis 47:24. These are educated folks, but few know the historic basis of economics.  What is taught in colleges?  Do they teach the simple objective of seeking an optimum relationship between the people and government?  Has it eluded the elected folks? Or is it something else? 

When the economy is taxed perfectly and the government gets 18.3% of our economy instead of the 40%+ they take now in federal, state and local taxes, the nation thrives.  If they tax more the economy shrinks and tax revenues decline and elected folks become relatively more powerful as more people are dependent on them. They enjoy greater awe, respect from fear and applause while basking in their power. The drug of power is an addiction far greater than any opiate and quickly acquired by the elected ruling class.  

Mr. Obama has seen to the printing of one trillion of baseless Bernanke and Yellin Dollars every year of his Presidency.  Sent to the banks to boost the economy they have done everything but.  Where businesses have seen little reason to expand, and more to contract, Walmart and Mac Donald's are having trouble.  There is very little interest in business loans of any kind.

Bankers are all "smart fellers" feeling they can "beat the market" so with Glass Steagal gone they can and put the money into trading stock.  With the constant flow of new Federal Reserve notes the equities markets have gone up on inflation alone.  When we do all the math we can see no justification for a DOW greater than 6,000, maybe 8000, but it is now 18,000!

No only has "Quantitative Easing" inflated the market, but it has attracted much other real money, that which stood for a corn crop or manufactured goods where Fed money represents nothing as the "T-Bonds" designed to verify the appropriateness of the paper by sale were not sold!  It is the selling of those bonds that validates paper notes!  It is just that simple and that those sales did not happen means we are in Obama Wonderland at the greatest "Mad Hatter" tea party in history.  This chalice could crack and collapse any time!  There is literally nothing holding it together.

The chart is the establishing shot of the greatest financial lie ever told:  The validity of the Obama economy!  It is not and the day of reckoning will surely come to resolve the Obama Effect.

Adrian Vance