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I’m going to let you in on a little secret…

A bull market in stocks is now a matter of national security.

Some 58% of American households have exposure to the stock market. In terms of actual wealth, 45% of household wealth is invested in stocks. Yes, nearly HALF of the wealth Americans own is tied to the stock market.

In this context alone, a major bear market/ crisis in stocks represents a matter of national security in terms of economic damage. It’s the equivalent of an economic nuclear weapon.

But wait… this relationship is even deeper than most realize.

The stock market is now in fact the economy.

We are in a “K” shaped economy in which the top 10% of incomes/ consumers accounts for nearly ALL of consumer spending/ economic growth while the bottom 90% of the incomes/ consumers are struggling with the higher costs of living due to inflation.

The top 10% of households, the people who are literally driving the economy due to their consumer spending, own over 90% of stocks. In this context, a bear market in stocks would trigger a massive decline in consumer spending. And since consumer spending accounts for 70% of GDP, this would immediately lead to a recession.

This is not hyperbole. We got a taste of this during the trade war/ tariff tantrum in March/ April 2025, when stocks declined 18% in four weeks, erasing $11 trillion in wealth. At that time, numerous companies ranging from Southwest Airlines to Chipotle to PepsiCo warned that they were seeing a pullback in consumer spending that was recessionary.

Stocks bottomed and this changed… and since that time, the economy has chugged along. 

I bring all of this up because it is clear, plain as day, that the Fed and the Trump administration are willing to intervene to prop up/ support stocks. Yesterday it was NY Fed President John Williams stating that the Fed was going to cut rates in December.

Stocks exploded higher on the news.

This is nothing new. Time and again we’ve seen stocks on the verge of breaking down only to be “saved” by a Fed official or President Trump tweeting something, etc.

Again… a bull market is now a matter of national security for the Powers That Be. In this context the doors are open to what I call the Great Global Melt Up… a situation in which stocks and other rise assets EXPLODE higher to levels that seem ridiculous.

The time to prepare for what this means for the markets is NOW before this happens.

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