Tax season for accountants is a grueling ordeal that begins at the first of January and does not wind down until the last day of April (first quarter payroll taxes are due 4/30).  Accordingly, only time has prevented my thoughts from arriving on these pages prior to today.

Meeting with approximatly 1400 people and requesting their opinions on what we are fed by the media as to the current state of the economy has provided me the basis to make the following analysis:

By a factor of 1398 to 2, folks overwhelmingly disapprove of how the economy is being handled.  The taxpayer has reached a tipping point with regard to our Treasury Department’s approach to handling this crisis.  The very idea that we are literally giving trillions of dollars to billionaires in the hope to stop a downturn in our economy is absurd, at a minimum.  The absurdity rises to the level of outright theft when the Federal Reserve (a private consortium of banks not connected at all to our government) announces their intention to create massive inflation as a cure to the “economic crisis”.

The approaches taken by the Federal Reserve and the Treasury Department combined will result in the wealthy elite bankers and their Wall Street cronies enriched with trillions of dollars, while the rest of society is saddled with massive price hikes for everyday goods, massive unemployment, and a collapsed economy.  Regardless of whether we suffer massive inflation or deflation, the wealthy elite have been protected by receiving trillions of dollars of taxpayer money to carry them through the crisis and beyond.

We have heard the argument by the folks in the conservative media that President Obama is a socialist.  Well, it appears that the appointment of Mr. Geitner (who previously ran the NY Federal Reserve) insured that the socialist tag was correct with respect to the wealthy elite.  It appears that our President has adopted a policy of socialism for the wealthy-as Mr. Geitner’s trillion dollar giveaways at taxpayer expense prove.  We will never see a larger transfer of wealth in our lives than the transfer underway now.  Should the present policies instituted by Mr. Geitner and our President continue to fruition, our entire middle class will be wiped out.  The fallout to society will be a class system of the wealthy and the poor.

The media folks at CNBC and their cheerleading stock market hypers will have you thinking the economy is on the mend, that things are just jim-dandy.  Let’s look at the stock market of 1929 first and compare to today:

The above chart is the beginning of the worst economic collapse in recorded history.  Note the nearly 40% decline, with a bear market rally of nearly 29% post crash.

Now let’s take a look at a chart of the DJIA today:

Anyone notice the severity of the present day stock market collapse is significantly greater than 1929?  We can calculate the drop in the DJIA average in 2008 is greater by a factor of 22%.  Accordingly, should we implement a bear market rally measuring 22% higher than the 1930 rally, we arrive at the approximate point of  intermediate downtrend line intersection with the upward trendline of the present rally.  It would appear then that we have less than 30 more days  to this stock market rally, after which it (the market) almost certainly will get ugly.

The four year DJIA from 1929 to 1933 appears below:

Should we suffer an 86% decline post rally, the DJIA will fall to nearly 1250.

It should be noted that the government’s first response to the economic collapse in 1929 was to attempt to create massive inflation in 1931.  As we all know, that response failed gravely.

Let’s hope we come up with a better plan.  Perhaps we can simply let nature take it’s course and free markets correct things accordingly.