Why the stock market will fall for the next couple of years (2011-2015)?

An impasse has been reached. In your heart of hearts most of you know when you're getting a deal that's too good to be true. That's what we've had for about 20 years now. We lurch from crisis (1975) to crisis (2008) without fixing any underlying problems. Our system just doesn't seem to cope well with the idea of steady growth (with occasional growth spurts). Everyone in the population wants to be part of the "spurt" this in turn leads to a lurching economy that rolls from one extreme to another.

How sad it is that millions have to suffer because of our own inadequacies. Maybe Tom Cruise was right in the film A Few Good Men - "We just can't handle the truth!". So politicians can't tell us the truth. I'm not blaming them, I'm blaming the Western world. The whole idea of politicians is to have someone deal with issues that we have no interest in. I don't blame them for taking advantage. If they told us the truth (like Ron Paul in the US and some of Vince Cable in Britain) we just don't elect them. Divided we will fall - and the rich shall continue to inherit the Earth. By rich I mean the old moneyed class who simply use labour as a productive asset to gain a large inequity between the working class (if you work, thats you!) and them. The money they have is essentially wasted unless it is funnelled to entrepreneurial ventures. Don't get me wrong - if we taxed them, the Government would also waste the money so I don't think they should be taxed to death either.

The problem lies with TRUST. Gaining trust always takes time, but losing it take a nanosecond. As we lose trust in our governments the very system we have created to create our security blanket will fail around us. We will lose faith in other systems too, such as corporations and the stock market. These will plumet as our fear intensifies and we realise that there are no quick fixes to our debt problems. Only time, i.e default through inflation or massive debt write downs could save us. These will inflict too much pain on the monied classes, our pensions (i.e baby boomers) and are politicians (they need an explanation to enable re-election).

So, the stock markets will fall, probably overshoot their actual real losses due to paralysis. But don't fear, after that the era of private growth will begin again just as it has done countless times in history (fall of the Chinese, Roman empires). We will slowly enable real capitalism again e.g survival of the fittest with proper risk management and rewards for success rather than the status quo. In the new period the stock market will race to new highs as the money which used to sit in government bonds comes flooding into the growth areas of society. It'll take a while to get there, and there will be pain along the way but like each cycle, for every trough there will be a peak, as long as human beings exist and continue to strive for uneven gains over solid sustainable growth - the grass is always greener syndrome drives us to new lows as well as new highs!