The Great Con of the Recovery: The Stock Wealth Effect

At this point, I seriously don’t know how anybody in their right mind can be happy that stocks are rallying. Back in 2009, when the market was staring into the abyss, it made sense. But now, after seeing the market double from its 2009 lows… is this really something to be happy about?


Especially when it’s occurring on the back of the Dollar’s collapse?


In case you missed it, the Dollar officially this week the US Dollar officially broke below its 2009 low on its daily close…



And it’s weekly close…


We now have only one line of support left (the 2008 low) before the greenback breaks into uncharted territory, triggering the long-term Head and Shoulders pattern that everyone is aware of and which forecasts a 50% devaluation in the coming years.


Stepping back from this, you really can’t help but notice how stupid the whole “stock wealth effect” ideology is. Setting aside the fact that MOST of the gains stocks have produced since 2009 are due to US Dollar devaluation, it strikes me as odd that someone would think they were richer because their stock portfolio was up… while the cost of just about everything has ALSO gone up tremendously.


Since March 2009, stocks have doubled. However, oil has nearly TRIPLED in price.


In order for people to actually make money with stocks, they have to SELL the stocks. Agricultural commodities have nearly doubled in value too. In fact, the only thing that HASN’T gone up is home prices and incomes.


So the idea that you’ve made money by owning stocks since 2009 is a little hard to swallow as all those paper gains are eaten up by the higher cost of living.


On top of this, in order for you to MAKE money with stocks you have to SELL the stocks. So technically, all the money the “buy and hold” crowd has made going long since 2009 remains paper gains until they cash out. And when they do cash out… they’re cashing out into… US Dollars… which continue to drop like a stone.


Has the Fed really succeeded in generating wealth for anyone? Certainly not anyone who doesn’t work for a big bank. All the Fed’s really done is crank up inflation in the financial system while telling world investors that the US Dollar is trash (which further exacerbates the inflation).


Can the Fed stop this? Not a chance. A Dollar collapse is now guaranteed. The only reason we haven’t had it already is because the US Dollar priced against a basket of equally ugly paper currencies (Euros and Yen).


One by one, these various paper currencies will turn into confetti. The world’s central banks know only one thing and that’s MONEY PRINTING. The idea that they can somehow rein in inflation is absolutely laughable.


So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.


If you’ve yet to take steps to prepare your portfolio for the coming inflationary disaster, our FREE Special Report, The Inflationary Disaster explains not only why inflation is here now, why the Fed is powerless to stop it, and three investments that absolutely EXPLODE as a result of this.


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Good Investing!


Graham Summers