COTW: The Virtual Recovery

US Person believes that even Joe Sixpac now understands that there are two economies in America: the one he lives in and the one epitomized by the nightly Wall Street index quotes.  The relatively less volatile and broader S&P index recently hit a historic high, but when deflated by the 1980s' dollar, the trend line is still relatively flat. But the rich do keep getting richer, nevertheless:

Economist Gary Shilling calls the surge in stock investing the "grand disconnect", as well he might.  The increase in value is driven by cheap liquidity from the Federal Reserve, not underlying economic health. Here is Joe Sixpac's chart:

Joe ought to be concerned because the number of poor people is increasing faster than the number of non-farm payroll jobs. Another chart graphically correlates cheap money policy that benefits the plutocrats with unemployed, aging, increasingly obsolete Joe:

Low interest rates keep the US economy from contracting and boosts Wall Street, but do little to improve employment represented by the red line showing the percentage of employed persons compared to the population. That metric jumped off a cliff in 2008 and has not recovered since. This so-called recovery has helped profits before labor, a reversal of the usual recovery scenario:

As in Oz, where the Wizard controls events from behind the scenes, 'Bubbles' Bernanke and his Fed elves generate a virtual recovery with monetization of debt by buying almost all (90+%) of the US Treasury debt:

What is unsustainable usually comes to an abrupt end as it did just five years ago. US Person's advice is to follow the yellow brick road until you are not in Kansas anymore.