The Man at the Pump and the $50,000 Dow

Key Points:

The top 10% of Americans now drive 49.7% of all spending — a record. Thirty years ago it was 36%.
Their spending rides on one thing: stocks. S&P at 7,519. Dow above 50,000.
Gas is $4.49, up from $2.98 in February. Consumer sentiment just hit a record low.
Special Report: Skip the Line Opportunity: The SpaceX IPO
(from Brownstone Research)

I keep thinking about a man I saw at a gas station in Ohio last week. He stood there watching the numbers spin on the pump. He stopped at $40. Then he walked inside and put back a gallon of milk.

Gas was $2.98 in February. Today it's $4.49. I can't stop thinking about this. Two-thirds of Americans told a survey this month they are cutting back. Most of us feel it. Most of us are tightening up.

But here is what worries me. The economy looks fine. Stocks just closed near record highs. The S&P 500 hit 7,519 this week. The Dow broke 50,000. If you watch the news, things seem great. They are not great.

When Starlink Completes Its Global Takeover...

It's set to connect 3 billion people who've never had reliable internet.

That's the biggest connectivity explosion in human history.

Wall Street is focused on SpaceX.

But the smartest money is looking at a backdoor play almost no one's talking about.

A Potential IPO company already positioned to profit from every single new Starlink user — in 170 countries — before they ever go public.

And if you act fast, you can invest now at $0.50/share.

Click here for the full details

But don't wait.

Their last round sold out with 59,000+ total investors. Once word spreads — it could be too late.

⏰ Final week to invest before the share price moves on 05/29.

I dug into a number this week that stopped me cold. The richest 10% of households now account for 49.7% of all consumer spending in America. Half. Half of every dollar spent at every store, every restaurant, every car lot, comes from the top tenth.

Thirty years ago that number was 36%. Now it's almost 50%. I don't think most people realize how big a shift that is. The bottom 90% of the country, the regular folks, the guy at the pump, are now a side dish. The main course is rich people buying things.

And here is where my stomach drops. The rich aren't spending because their paychecks went up. They are spending because their stocks went up. Their wealth is in the market. When the market climbs, they feel rich. They book the trip. They buy the boat. They remodel the kitchen.

So picture this. The market is the floor. The floor is holding up half of everything. Half the restaurants. Half the airline tickets. Half the new cars. Half the jobs that depend on all that spending.

What happens if the market drops 20%?

Nobody knows for sure. I get it. Markets go up and down. We've seen drops before. But we have never been this dependent on one group of people, and that one group has never been this dependent on one thing.

The University of Michigan tracks how people feel about the economy. Their index just hit a record low. Retail sales fell in April once you take out inflation. Regular Americans are pulling back. The only thing keeping the whole machine running is the wealthy spending their paper gains.

That's not strength. That's a one-legged stool.

I want you to sit with the 49.7% for a minute. Half of all spending in the biggest economy on earth comes from ten people out of every hundred. And their spending rides on a stock chart. One chart. One number that moves every day for reasons nobody can fully explain.

The man at the gas station doesn't own much stock. Most people don't. The bottom half of Americans own about 1% of the market. So when stocks go up, he doesn't feel it. When stocks go down, he won't feel it either. Not at first.

But he'll feel it when his boss says the orders dried up. He'll feel it when his hours get cut. He'll feel it when the restaurant down the road closes because the wealthy families stopped coming in on Fridays.

The record high isn't the good news. It's the wall holding up the roof. And we built the whole house on it.

Don't Let This Slip By

Did you forget to download my Simple Options Trading for Beginners guide?

It's $29.97 on my website, but I set up a temporary backdoor link that gets you a free copy.

The smart move is to save a copy before the temp link expires.

Make sense?

Click here to download the $29.97 Simple Options Trading for Beginners report for free.

I'm not telling you to sell anything. I'm not telling you to panic. I'm telling you what I see, because I think it matters. We have an economy where the man putting back the milk and the family booking the cruise are living in two different countries. And the country that's still spending is one bad quarter away from joining the other one.

I keep picturing that pump. The numbers spinning. The milk going back on the shelf. And somewhere else, a stock ticker climbing, and a family clicking "book now" on a beach house in Florida.

Both of those things are the same economy. That's what scares me.

The Man at the Pump and the $50,000 Dow

Key Points:

When Starlink Completes Its Global Takeover...

Don't Let This Slip By

Keep Reading

American Ledger