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Of course its only the top 33% of Americans who will be enjoying the coming boom. The rest will be relegated to the status of the the global underclass. The reasons why these 67% of Americans will only get a few drops of trickle down can be found here, and here. It is also embedded in their political system in which they no longer as a real matter have any representation.
Even the top 33% is tricky. Today being in the top third of American wage earners does not really make you Middle Class. A wage earner in the top 33% would earn about $40,000 per year. But even if two people worked and brought in $80,000, that would only be Middle Class in places in America where it is cheaper to live.
The costs of health care and especially if people want to be able to pay for their children’s higher education, without them having to take out debts would mean having household incomes well over $80,000. In a 2011 study even raising a middle income American child to the age of 18, (no college) cost $226,000 in after tax dollars. Those figures are going to be considerably higher today.
Today it could well be argued that only 20% of Americans would even quality as what used to be called Middle Class. But I give the 33% figure because when we turn the chess board around and look at it from the side of the top 1% of Americans, these are the very best of days.
If you are a well off American you see yourself in a global oasis of a booming economy for as far as the eye can see.
In financial terms that is what they would call a secular, (long term) bull market in stocks and in the US dollar. And trickle down does work to some degree. It is those economic classes however closest to the wealthy which get the most of it. So over the years we can expect the Middle Class to expand beyond the 20% of today perhaps to 33%.
But even America’s poor and its endless lumpin lower middle class will benefit as the world falters. A rising tide will bring up all ships. Here is why.
As the vast majority of people understand local and global Geo Politics in mostly moralistic terms, it may seem unfair that a small entrenched American elite who are creating misery at home and war and havoc abroad should be rewarded with the very best of times.
But history does not listen much to human complaints about morality and fairness. It just flows through its own interior logic.
Obama has declared Cold War 2 against both Russia and China. Before this both countries had economic models based on cooperative relations with Empire, (The Anglo 5, Western Europe and Japan).
Now both Moscow and Beijing are having to restructure their economies away from Empire countries and those controlled by Empire (most of Eastern Europe, the Philippines, most in Latin America, and the Middle East) to growth based on their own internal economies, trade with each other and non- aligned nations.
For the Chinese and Russians this is going to be a long process of slow economic growth. And that will lead to low demand for commodities and low commodity prices. Unless the Germans green light infinite money printing from the European Central Bank, with the check being picked up in their name, the EU as it is presently set up is dead on the water.
That means a dead European economy for as far as the eye can see. The same is true for Japan but for different reasons.
The beneficiaries of all of this are the Americans, (albeit only the well healed). When Washington pulled off its Kiev caper effectively creating Cold War 2 against Russia and then put in place economic sanctions as well, it knew that Russia, (the world’s biggest oil exporter) would be selling the black gooey stuff for currencies other than the US dollar. That in effect meant an end to the Petro Dollar that was put in place 40 years ago.
So what would then give printing press dollars value?
Well how about a world that Washington is going to put into chaos? How about Sunni Power Rising, with global “terrorism” growing to proportions only dreamt of in your nightmares? How about a new war in Eastern Europe that would trigger a face off between Russia and NATO? How about a heating up to a boil of hostilities between the US and China? How about China and a nuclear Japan facing off? How about the next US president making Obama look like a pacifist?
When money is frightened it always seeks safety and the most secure place on earth will be the US, because all of the structural collapses and wars will be happening “over there”. That is wonderful for the US dollar and great for the US stock market because money that comes to the US will need to find a place to get a return.
And then there are DRILL BITS! Well what about drill bits? I am speaking here of drill bits that the US has now, that are capable of opening up old oil wells and extracting more out of them than the Saudis or Russians can extract using the best bits available on the market today, (outside of the US) from their known oil assets.
So for example if these state of the art bits were only to be used in the US, the Americans are the new Saudis of oil. They now have well over one hundred years of it. And their drill bits are only going to get better and better.
Because of this and what is likely to be low global demand for oil, (as there will be slow global growth) the price of oil should all but collapse or more precisely drop to a level the US government wants it to be for Geo Political reasons. Low oil prices, say in the mid 40 dollar range will be a knife in the heart to Russia, Iran and Venezuela. But it will be a major benefit to China and India.
Hmmm. Who do Washington planners want to screw and who do they want to benefit?
In any case low oil prices will be a huge help to poor and lower middle class Americans, with their gas guzzling SUVs and huge highway distances between cities. For them this will be like getting a big check in the mail from Uncle Sam every time they need to fill up their cars or for the heating oil needed for their homes. Even if these people don’t own a home, all things being equal, this will constrain rental prices.
For value added businesses low oil prices, along with low commodity prices are going to mean huge profit margins. That is even more true because the American wage base is so low. And that is with a 92 million person reserve, of potential workers now out of the labor market. Should these people be forced in to looking for work, by say the Republicans cutting their government subsidies, the American wage base should if anything drop
And these lower 67% of Americans have no political representation to help to equalize wealth. Here is a chart of what has happened to the markets, (for the rich) versus those out of the labor market since Obama took office.
And all of these corporate profits from things like robotized manufacture with embedded 3D Printing, low labor and commodity costs are going to come in an environment of very low inflation. If you are rich an owner how much better can things get?
The point is, do not expect that because the Americans are doing the wrong thing in their country and abroad, that the perpetrators are going to somehow pay for their crimes.
As I believe that the American Deep State wants a war president in 2016, they may need to conjure up a false flag to fully humiliate Obama and make him look like a weakling and a fool.
That may take the markets, (although not the dollar) for a big but temporary spin downwards.
Afterwards however the class that is giving the world war and poverty, will be back on top for as far as the eye can see.
Look towards a new age for the Americans at least from the standpoint of money and power.