Skip to content

Velocity Trader

Over the 64 trades in the model portfolio – 71.88% were profitable.

Velocity Trader

Global Trading Dispatch | An Inside Look at the “Underground” Economy

John Thomas – The Mad Hedge Fund Trader

There is no doubt that the “underground” economy is growing by leaps and bounds.

No, I’m not talking about violent crime, drug dealing, or prostitution.

Those are all largely driven by demographics, which right now, are at a low ebb.

I’m referring to the portion of the economy that the government can’t see, and therefore is not counted in its daily data releases.

This is a big problem.

Most investors rely on economic data to dictate their trading strategies.

When the data is strong, they aggressively buy stocks, assuming that a healthy economy will boost corporate profits.

When data is weak, we get the flip side, and investors bail on equities. They also sell commodities, precious metals, oil, and plow their spare cash into the bond market.

We are now more than half way through a decade that has delivered unrelentingly low annual GDP growth, around the 2%-2.5% level.

We all know the reasons. Retiring baby boomers, some 85 million of them, are a huge drag on the system, as they save, and don’t spend.

Generation X-ers do spend, but there are only 58 million of them. And many Millennials are still living in their parents’ basements—broke and unable to land paying jobs in this ultra cost conscious world.

But what if these numbers were wrong? What if the Feds were missing a big part of the picture?

I believe this is in fact what is happening.

I think the economy is now evolving so fast, thanks to the simultaneous hyper acceleration of multiple new technologies that the government is unable to keep up.

Further complicating matters is the fact that many new internet services are FREE, and therefore are invisible to government statisticians.

They are, in effect, reading from a playbook that is a decade or more old.

THE SPECIAL OFFER

Watch The Latest John Thomas Webinar Here

What if the economy was really growing at a 3-4% pace, but we just didn’t know it.

I’ll give you a good example.

The government’s Consumer Price Index is a basket of hundreds of different prices for the things we buy. But the Index rarely changes, while we do.

The figure the Index uses for Internet connections hasn’t changed in ten years.

Gee, do you think that the price of broadband has risen in a decade, with the 1,000-fold increase in speeds?

In the early 2,000’s you could barely watch a snippet of video on YouTube without your computer freezing up.

Now, I can download a two-hour movie in High Definition in just 30 seconds on my Comcast Xfinity 250 megabyte per second business line, and now they are offering me a 1 gigabyte service for a few more bucks a month.

And many people now watch movies on their iPhones. I see them in the rush hour traffic and on planes.

I’ll give you another example of the burgeoning black economy: Me.

My business shows up nowhere in the government economic data because it is entirely online. No bricks and mortar here!

Yet, I employ a dozen people, provide services to thousands of individuals, institutions, and governments in 140 countries, and take in millions of dollars in revenues in the process.

I pay a lot of American taxes too.

How many more ME’s are out there? I would bet millions.

If the government were understating the strength of the economy, what would the stock market look like?

It would keep going up every year like clockwork, as ever-rising profits feed into stronger share prices.

But multiples would never get very high (now at 20 times earnings) because no one believed in the rally, since the economic data was so weak.

That would leave them constantly underweight equities in a bull market.

Stocks would miraculously and eternally climb a wall of worry. Did I mention that the S$P 500 is at another all time high?

On the other hand, bonds would remain strong as well, and interest rates low, because so many individuals and corporations were plowing excess, unexpected profits into fixed income securities.

Structural deflation would also give them a big tailwind.

If any of this sounds familiar, please raise your hand.

I have been analyzing economic data for a half century, so I am used to government statistics being incorrect.

It was a particular problem in emerging economies, like Japan and China, which were just getting a handle on what comprised their economies for the first time.

But to make this claim about the United States government, which has been counting things for 225 years, is a bit like saying the emperor has no clothes.

Sure, there was always been a lag between the government numbers and reality.

In the old days they used horses to collect data, and during the Great Depression numbers were kept on 3” X 5” index cards filled out with fountain pens.

But today, the disconnect is greater than it ever has been, by a large margin, thanks to technology.

Is this unbelievable?

Yes, but you better get used to the unbelievable.

As for that bull market in stocks, it just might keep on going longer than anyone thinks.

united-states-gdp-growth

Author John GladstonPosted on July 11, 2018Categories Mad Hedge Technology LetterTags best options strategy, explain options trading, Free Global Trading Dispatch, Global Trading Dispatch, Global Trading Dispatch Blog, Global Trading Dispatch Coaching Program, Global Trading Dispatch Coaching Program and Trading Service, Global Trading Dispatch Coaching Program Review, Global Trading Dispatch Download, Global Trading Dispatch Forum, Global Trading Dispatch Free Download, Global Trading Dispatch Program Review, Global Trading Dispatch Review, Global Trading Dispatch Reviews, Global Trading Dispatch Scam, Global Trading Dispatch Service, Global Trading Dispatch Warrior Forum, John Thomas, John Thomas Mad Day Trader, John Thomas Mad Day Trader Review, John Thomas Mad Day Trader Scam, John Thomas Mad Hedge Fund Trader, John Thomas Mad Hedge Fund Trader Review, John Thomas Mad Hedge Fund Trader Scam, learn to trade options, Mad Day Trader, Mad Day Trader Review, Mad Day Trader Reviews, Mad Day Trader Scam, mad hedge fund, Mad Hedge Fund Trader, mad hedge fund trader performance, Mad Hedge Fund Trader Review, Mad Hedge Fund Trader Reviews, Mad Hedge Fund Trader Scam, Mad Hedge Technology Letter, Mad Hedge Technology Letter Discount, Mad Hedge Technology Letter FAQ, Mad Hedge Technology Letter Inside, Mad Hedge Technology Letter Login, Mad Hedge Technology Letter performance, Mad Hedge Technology Letter Price, Mad Hedge Technology Letter Real Member Review, Mad Hedge Technology Letter Review, Mad Hedge Technology Letter Reviews, Mad Hedge Technology Letter Scam, Mad Hedge Technology Letter User Experience, option trading, option trading strategy, options trading, options trading newsletter, options trading strategies, options trading tips, options trading webinar, stock options trading, Stocks to Buy For The Roaring Twenties, Understanding Options, understanding options trading

Post navigation

Previous Previous post: Jason Bond Picks Millionaire Roadmap | 1 Hack to Make $3K-$6K on Penny Stocks
Next Next post: FREE CRYPTO INVESTMENT EVENT
Velocity Trader > Mad Hedge Technology Letter > Global Trading Dispatch | An Inside Look at the “Underground” Economy

Tags

  • charts
  • Dow Jones
  • ETFs
  • GS
  • Jeff Bishop Review
  • learn to trade options
  • markets
  • NASDAQ
  • Option Rocket Kyle Dennis
  • Option Rocket Review
  • Option Rocket Reviews
  • Option Rocket Scam
  • options
  • Options Rocket Kyle Dennis
  • Options Rocket login
  • Options Rocket Review
  • Options Rocket Reviews
  • Options Rocket Scam
  • Options Rocket User experience
  • Options Rocket user review
  • Options Rocket webinar
  • Options Rocket website
  • options trading
  • options trading newsletter
  • options trading strategies
  • options trading tips
  • options trading webinar
  • option trading
  • option trading strategy
  • Russell
  • S&P
  • SPX
  • SPY
  • squeeze
  • strategies
  • trading
  • understanding options trading
  • VIX
  • Weekly Money Multiplier
  • Weekly Money Multiplier login
  • Weekly Money Multiplier Real User Review
  • Weekly Money Multiplier Review
  • Weekly Money Multiplier Reviews
  • Weekly Money Multiplier Scam
  • Weekly Money Multiplier User Experience

Jeff Brown Tech Melt

Teeka Tiwari's Investment of the Decade

Teeka Tiwari's Investment of the Decade

Insider - Asymmetric Investing Service

The Smartest Investment Strategy of All Time - Bill O'Reilly and Alex Green

Blitz Tracker

CRISIS INVESTING 2020: Emergency Briefing

Recent Posts

  • Project Mastermind 2021: Is Louis Navellier’s Event Legit?
  • What Is The Pre IPO Code by Jeff Brown? Is It Legit?
  • Whitney Tilson TAAS Stock Pick: Obscure stock group returns 570% on average
  • Jason Bond’s 3 Simple Chart Patterns – How they work?
  • Graham Summers’s Death Spiral: Have You Prepared Your Loved Ones for January 15?

Top 7 Trading Resources

Best Trading Advice

Steady Income Investments

Crypto News

Options Trading Strategies

Top Marijuana Stocks

FREE Trade Alerts

Best Blockchain Stocks to Buy

Velocity Trader Proudly powered by WordPress