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Controversial, Conservative, Courageous
The primary purpose of this blog is to explore the intellectual and moral basis of  political systems. But there is a lot more. Here marks the confluence of economics, politics, religion, biblical eschatology, reason, and evidence.

April 7, 2013 
Is the Stock Market about to Crash?

The Dow Jones Industrial Average reached a high last week of 14684. Let's consider the reasons for optimism and for pessimism about the stock market from here.

 

Reasons the Market Might Go Higher:

  • The Fed is keeping rates so low that it is forcing investors to buy stocks (and real estate) to try to get a return on their money. They have said that this will continue until unemployment gets to around 6.5%, which could be many months from now in the best scenario. Fed action could propel stocks massively higher.

 

  • Price earnings ratios are only slightly above normal: currently Dow 16, S&P 18. 

 

  • The economy is making progress, as evidenced by the unemployment rate inching lower, now 7.6%.

Reasons the Market Might Drop:
  • We are 49 months into this bull market, which began in March of 2009. The average bull market since 1900 has been 31 months long. The Dow is up 128% over this period, compared to an average historical bull market gain of 90%. We are long in the tooth. 
  • We are in a "secular" (long term) bear market which began in January of 2000. There have been two other secular bear markets since 1900, one began in 1929, the other in 1968. Each of these had three cyclical" (shorter term) bear market periods. So far we have had only two (2000-2002 to 2007 to 2009), so a third would be normal. 
  • It would be normal for p/e ratios to sink to under 10 at the end of a secular bear market. 
  • Based on various various surveys, nearly two-thirds of investors are optimistic. This usually marks a top. When investors are this optimistic, any change in psychology has to be negative. 
  • Earnings progress for American companies may be waning. Earnings estimates are on balance beginning to disappoint. 
  • Both consumers and governments have more debt than they can afford. The debt contraction that is inevitable will be a drag on the economy. 
  • The problems in Europe are not over. There will be defaults and runs on banks. Cypress is a warning shot across the bow. Governments across the globe are completely irresponsible, and we have passed the point that luck or normal economic growth will bail them out.
Conclusion: While nobody knows just when this party ends, it is more likely to end badly. There just is no growth driver in the economy that is strong enough to propel us through the worldwide debt problems. We are beginning to see how liberal political policies can wreck an economy.


Sincerely and hopefully,

 
Charles Meek
Off Grid Blogger
 
 


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The utopian perfectibility that liberals crave is detrimental to society--indeed, not even possible by government edict or by any human effort. Liberals are deceived in thinking they are working for good. The welfare state, while well-intentioned, institutionalizes indolence and poverty--and is thereby immoral. The result of the welfare state is not true charity; rather it is theft from one group to benefit another group in order to keep the latter on the dole for political votes. 

While a just society will seek equality of opportunity and appropriate assistance for the truly needy, liberal redistribution schemes ultimately hurt both the recipients and the contributors. Wealth redistribution forced by the heavy hand of the state distorts the moral arrangement between parties when charity is freely given. There is a difference between a hand-up and a hand-out.

Biblically ordered liberty is moral. But liberalism in any of its forms, properly understood, are tyrannical. All forms of utopian statism have as their root the need to control other people by edict rather than by conscience. Statism is inherently inefficient, produces little, takes resources from the productive economy, and is therefore detrimental to growth and the welfare of a society. 

 

Liberalism has everything turned on it head. It punishes achievement but rewards failure. Liberal thought is often opposed to objective moral values and is opposed to a moral authority above itself. Thus liberal thought says that rights come from government, rather the American ideal of unalienable rights from God. It is demonstrably true that little is sacred with liberalism outside of one's personal subjective feelings or political power--not the Bible, not the Constitution, not the Rule of Law, not natural law, nor even life itself. 

 

Thus liberalism is the least likely system to honor the inherent worth of the individual, and the most likely to harm the most vulnerable in society such as the expendable elderly and the innocent unborn. Liberals' profession of tolerance is hypocritical as liberals certainly do not tolerate opposition to their errant views. Liberals are tolerant until you disagree; then you become a racist hillbilly. Indeed, the further left a society progresses the more it is intolerant and destructive--a fact proven time and again by history.

 

While liberals may be moral and well-intentioned in their own lives, their views are not consistent with what is good. In actuality liberals are working to tear down or distort everything that is good and elevate what is evil--including in art, music, culture, business, politics, science, sexuality, education, truth, beauty, justice, morality, and logic. So ironically liberalism is neither moral, compassionate, tolerant, nor effective. Christian capitalism is the most moral, leads to the most freedom, and produces the most economic benefits for society.

 

"One of the greatest mistakes is to judge policies and programs by their intentions rather than their results."                                                                 --Milton Friedman


If the foundations are destroyed, what can the righteous do?  --Psalm 11:3

Redeem us, Oh Lord, from man's oppression. Make your enemies like whirling dust, like chaff before the wind.  --Psalms 83:13; 119:124

With his mouth the godless man would destroy his neighbor, but by knowledge the righteous are delivered.  --Proverbs 11:9

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Foundation
The liberal agenda has as its center piece the twin goals of compassion and fairness. However noble these goals may be, the dirty little secret of liberalism is that behind this respectable front, liberal policies actually produce the opposite!
 
For liberals, America is a 200+ year-old mistake. What liberals really want is the destruction of institutions that promote true compassion and fairness--including the Constitution, the Bill of Rights, the Rule of Law, natural law, Biblical Christianity, frugal and responsible government, and traditional western values. Their unstated goals are control and cronyism--ultimately the obliteration of anything that gets in their way of their lust of power. 
 
Liberal politics by its nature is divisive and unfair, promoting envy and covetousness among groups of citizens. Its beneficiaries are largely arbitrary and may include young men in baggy pants with their hats on backwards (sitting in front of a TV all day)--as well as the single moms around town that these studs impregnated. But just as easily liberal cronyism will cull other groups for support including union bosses, abortionists, bankrupting solar executives, or guilt-ridden movie stars.
 
Government intervention leads to dependency, which creates indolence, which produces economic stagnation. Liberals are mistaken in their idea that the economy is a pie to be divided up by government. The economy is a dynamic entity which grows by innovation and human effort. Only policies which promote growth ultimately benefit a society, including the poor.
 
           --Off Grid Blogger
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