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On the campaign trail for the 2016 presidential election, then-candidate Donald Trump routinely blasted the “fake news” media. One of his favorite topics was the Obama administration; specifically, that the former President had only improved the economy on paper. But on Main Street, the real economy was showing real signs of fissures.

And let’s face facts: Trump, who previously held no political office prior to holding the most powerful one, emerged victorious on the real economy. Inherently and instinctively, people don’t give a rat’s behind about high-level granular statistics like GDP per capita and other benchmarks. They know whether they have enough to make ends meet or not.

Another point is that poverty is becoming a broader topic on the issue of the real economy. Financial hardships aren’t just negatively impacting disenfranchised communities: historically, the majority populace found these social segments easy to ignore. Now, economic hurdles have stymied the white middle class, so much so that experts are talking about its complete erosion.

That was an unthinkable concept throughout the 20th century. It’s an ugly reality today, and one that is substantially worsening.

 

Blue-chip Financials Give the Clearest Picture of the Real Economy

As an investor in the equities market, it pays not only to analyze your target asset, but the bigger picture. Sometimes, you can get lost in the seemingly robust fundamentals of a particular organization. However, if the overall platform drops, you’ll rarely find a publicly traded security that won’t experience at least some volatility.

Therefore, I like to look at big bank stocks. As market and economic bellwethers, they provide some of the clearest signals of coming prosperity or pain. And what I find time and again is that financial institutions make their money on monetary policy; that is, money created from money.

They’re not generating revenues from actual products or services. As you can imagine, that’s a huge problem.

An additional factor you can consider is the credit industry. The average American credit-card holder carries an insane amount of debt. This is not debt that is useful, such as liabilities associated with starting profit-making ventures. Instead, this is just a means for holding millions of families over until the next bull market.

But the problem is, we’ve had a bull market for a decade. At some point, we need a correction. When that comes, I’m not sure how the limping real economy will cope.