For years the debate has raged on between the long-term bears and the long-term bulls, those who believe the U.S. stock market and economy is doomed to crash in 1929 fashion, and those who believe the economic outlook brighter for the foreseeable future. At no time in recent years has the debate been as sharp or as acrid as it has this year. Even former bulls have converted and have gone over into the bearish camp in 2004, apparently lulled by the arguments of a global economic slowdown and record levels of debt.
It's amazing what the 10-year cycle can do in the way of influencing investor psychology. This happens every fourth year of every decade -- the last of the long-term holdouts get shaken from the bullish tree and turn bearish. The bears, meanwhile, get even more bearish than normal, which of course paves the way (psychologically) for the big rally that begins typically by the fourth quarter of the X4 year and continues well into the X5 year each and every decade. You can't have a bull market without a relatively high percentage of angry bears, and this year has given us this much-needed element which will serve as so much rocket fuel for the broad market and economy in the months ahead.
Don't get me wrong. It's not like I can't sympathize with all the bearish arguments being bandied around out there. I used to be bearish myself but was brought to see the light in early 2003 after a major long-term pivotal support in the Dow was successfully tested for the fourth time in six years. This, among other observations, proved to my satisfaction that the controllers of America's financial destiny had no intention of crashing the market anytime soon.
This leads me to the subject of this missive, namely, the "Global Economic Order," or GEO for short. That's just a fancy way of saying "global economy." It should be obvious to anyone who pays attention to world affairs and follows closely the current line of the major corporate and financial interests that a major goal of the money Elites is a fully integrated world economy. And world economy, whether we like it or not, is what we're going to get before all is said and done. In a nutshell, this is why the bearish argument cannot and will not be allowed to be fulfilled this decade. We haven't arrived at the long sought-after Elitist goal of Global Economic Order (GEO) yet. There are still Third World countries to be "democratized' (which means to pave the way for global economic integration). There are still trade barriers to be dismantled. And until the globalization process is complete, America's financial controllers will not allow the world's premier engine of economic growth to slide into serious recession, nor will its vital stock market or real estate markets be allowed to crash. It's that simple, yet the bears keep tripping over the obviousness of it.
An Internet friend recently e-mailed me the following observation concerning this failure of the bears to take into account the careful control and manipulation of financial markets: "You'd think these guys who talk nothing but Austrian school economics would remember what Adam Smith had to say about the obviousness of elitist manipulation." What an insightful point! And herein lies the seed of the bears' (as well as the Austrian School proponents') errors: they give credence to the concept of a vague, nebulous "Invisible Hand," never once realizing that the Invisible Hand is actually the behind-the-scenes influence of the money controllers! In today's world that would be mostly the central bank cartels, including the Fed.
The bears have this mistaken notion that the Fed doesn't ultimately control the course of the U.S. economy and that eventually the economy will get beyond the Fed's control. But they have again failed to consider the Golden Rule of finance: "He who has the gold makes the rule!" The interests that control the issuance of money can and do control the financial system and economic superstructure in which the money circulates. A recession/depression cannot happen unless the Fed creates it by restricting the money supply. Conversely, a financial boom cannot get underway unless directed by the Fed. This is not a statement of approval of the Fed's operations but merely an observation of fact -- a simple yet often overlooked fact. It's the cornerstone axiom of the GEO.
That leads us to an inescapable conclusion. If in fact the Fed dictates the state of the economy, why would they create the conditions necessary for a recession/depression at this point in time? Clearly, they haven't yet succeeded in the primary goal of a fully integrated GEO. So why botch the operation, the product of many decades of careful labor, now? Why crash the stock and real estate markets now when they are needed most to keep things flowing along at an even keel before the introduction of GEO? In my opinion, the bears need to be asking these questions among themselves.
Believe it or not, there was actually a time when the Elites had planned to crash the U.S. economy and engineer a worldwide depression. The Great Depression of the early 1930s was a trial run of sorts in this direction. The financial controllers had assumed that Americans would turn to the government and cry out for help, desperate to the point of surrendering their Constitutional rights and allowing the Elites to bring about the plan for an integrated world economy through necessity. The Clinton years, however, opened their eyes and made them see that a different approach was needed. During this time of widespread (if artificial) prosperity, the Elitists observed what happened when Americans were given whatever their hearts desired. While rich in material possessions during the boom years of the late '90s, Americans were totally oblivious to major changes in the world economic and political scene. They were equally oblivious to the steady erosion of Constitutional liberties, federal creep, and huge tax increases that happened right under their noses during the Clinton era. As long as they were prosperous, Americans were placated and the Elitists found little resistance in proceeding with their plans of bringing about a fully functional GEO. This, they discovered, was the key to their success --engineer a bull market and keep the economy afloat as long as possible to keep everyone happy and distracted while the GEO is quietly being assembled.
Thus, the bullish case won out over the bearish case. And it will most likely continue to win out for the remainder of this decade. It will become apparent to the last of the bearish hold-outs by the end of this year that their longed-for stock market crash isn't happening as instead the markets continue to move higher. It will especially be apparent next year when there is no more pressure on top of the markets from the 10-year cycle, which even now is in the process of bottoming. The very fact that market has held up so far this year under the falling 10-year cycle is further proof that the market is being supported by the manipulators. The market has a tendency to decline beneath its falling 120-day moving average in X4 years when the 10-year cycle bottoms. This has so far been the case this year. But once the Dow breaks out above the 120-day moving average (currently at 10,200) it will rally in a big way and will astonish the bears who were fully expecting a summer crash. The bears will be further surprised when the fourth quarter witnesses further gains as well as improvement in the general economy.
Another big surprise for the bears will be when oil prices continue lower in coming months, as the oil price has already peaked (as predicted in my August 11 commentary, "Is Oil Running Out of Gas?"). This has been another of they lynchpin arguments for a major global recession/depression. They never tire of talking of "Peak Oil." (If by "peak" oil they mean the oil price uptrend has peaked, then I fully agree!) Unfortunately for them, the bears have been the victims of a skillful propaganda campaign by some behind-the-scenes interest (probably short sellers who wanted to increase the downside potential in oil by getting everyone to expect a sustained long-term uptrend in the oil price). There is no "Peak Oil"! The world is positively swimming in the stuff, as perpetual oil wells have been discovered in Mexico. There are also numerous capped and untapped oil and gas wells throughout North America and elsewhere. The recent high oil and gas prices were partly a function of temporary supply disruptions (along with a high degree of market manipulation) stemming from the late war in Iraq. But aside from these temporary supply disruptions that occur from time to time, here is one reason why natural resource prices in general will remain at reasonable levels in coming years: the Elites will continue to steal resources from Third World countries, thus keeping supplies high and prices relatively low.
China, the world's up-and-coming Super Economy, has been another major concern this year. We never cease to hear in the financial press how that China is about to slip head-long into major recession or depression and that its stock market is doomed to crash. Here again the bearish case is wrong. China has bottomed. This is a simple fact that will be proven correct in coming months, although many haven't recognized it yet. The Elites will not allow China to break down after spending the better part of 30 years of building up to the level it has reached today. GEO depends in large measure on China. Anyone who thinks the Elites will allow China to sink now needs a reality check!
These are just some of the axioms of the Global Economic Order. The clear and stated goal of the ruling Elites is a fully functional, totally integrated world economy. And until they get it, they won't allow the U.S. to sink into the financial bottomless pit. The engineered bull market recovery will continue into the foreseeable future.