A Credit Rating Downgrade And A Market Collapse Coming In Weeks: Wealthy Fleeing France, UK, U.S. As The Country Is Entering An Era Of Fiscal Austerity And Tax Rates Becoming Unbearable, Fiscal Cliff Deal Looking Increasingly Unlikely, And Economic Growth In Advanced Economies Is Essentially Over!

from Phoenix Capital Research

The market continues to track the same pattern it performed going into the failed debt ceiling talks of July 2011. As you’ll recall, then as is the case now, US politicians failed to reach a credible solution to the US’s debt problems. What followed was a credit rating downgrade and a market collapse:

Here’s the S&P 500′s recent action:

Here’s the S&P 500′s action going into the failed debt ceiling talks of 2011:

Here’s what followed:

Be forewarned. As noted earlier this week there are no political incentives for the GOP or Democrats to propose a real solution to the fiscal cliff. So it is highly likely we will be going over the cliff.

Another item holding up the market is hype and hope of more QE from the Federal Reserve at its December 10-11 meeting. I have to admit, I find this proposal completely baffling. Macroeconomics 101 dictates that it takes a full six months or more before a change in monetary policy by the Fed will be fully digested by the system. The Fed just announced a new program three months ago. So the academics at the Fed aren’t even drinking their own Kool-Aid anymore….

BREAKING: Boehner: Obama Walking Economy to Edge of ‘Cliff’

The End Of US Is Coming? Jobless Rate Falls To 7.7% Due To 540,000 People Drop From Labor Force While The United States Actually Has A Higher Percentage Of Workers Doing Low Wage Work Than Any Other Major Industrialized Nation Does!

Fiscal Cliff 2013: Why It’s Looking Like No Deal

Expectations have changed lately regarding fiscal cliff 2013. It’s looking increasingly likely that we are going over it.

U.S. Treasury Secretary Timothy Geithner, U.S. President Barack Obama’s lead delegator on the fiscal cliff talks, told CNBC the Obama administration is “absolutely” prepared to go over the cliff if Republicans don’t change their tune on taxes.

President Obama and Republican House Speaker John Boehner on Wednesday, along with Congressional Republicans, reiterated their stance on the fiscal cliff. No compromise was reached, with just 25 days remaining before zero hour.

President Obama maintains there could be a quick deal if Republican lawmakers withdraw their resistance to raising taxes for individuals earning more than $250,000 a year, swapping for concessions on federal spending cuts and entitlement reforms….

The US Is Entering A New Era Of Fiscal Austerity

In discussing the fiscal cliff issue, the one big takeaway not to forget is that it is all about austerity—-extreme austerity if we go over the cliff and a lesser amount of austerity if we settle it before year-end.

More than likely, this is the start of new era of fiscal austerity in the U.S. In no way do we see this as a solution to the myriad of problems besetting the U.S. economy and stock market.

These include the still excessive level of household debt that is the main culprit holding back economic growth, a loss of economic momentum in the last few months, declining earnings estimates and guidance, the European recession and the growth slowdowns in the BRIC nations and emerging markets.

Austerity Pushes Europe Into Its Second Recession In Four Years

Wealthy Americans Fleeing The U.S. As Tax Rates Becoming Unbearable

Just counting federal, state and local income taxes, some Americans will be paying marginal tax rates of over 50 percent in 2013. But like I said, there are a lot of other taxes we pay than just those.

…

1. Thanks to Proposition 30, many high income residents of California will be paying marginal income tax rates of51.9% in 2013 if the fiscal cliff is not avoided. Keep in mind that the 51.9% figure only includes federal and state income taxes. It does not count any of the dozens of other taxes that we pay each year.

2. If a fiscal cliff deal is not reached, many residents of New York and Hawaii will also be paying marginal income tax rates of more than 50 percent.

3. If Americans fully funded the government through their taxes without any borrowing, the average American would have to work for 197 days just to meet the expenses incurred by government.

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Income tax will exceed 50% in California, Hawaii, and New York City

Read more at http://investmentwatchblog.com/a-credit-rating-downgrade-and-a-market-collapse-coming-in-weeks-wealthy-fleeing-france-uk-u-s-as-the-country-is-entering-an-era-of-fiscal-austerity-and-tax-rates-becoming-unbearable-fiscal-cliff/#WLz5Y2ppFq1CASwF.99