That's the title of a very important article by Charles Hugh Smith. He points out that most of the corporate profits driving the stock market rally are the result of currency manipulation rather than actual productivity gains or increased sales. They're 'phantom' profits, not the real thing. Here's an excerpt.
Though few domestic observers make mention of it, the large, global U.S.-based corporations are now dependent on non-U.S. sales for about 40% of their revenues (50% and up for many companies) and virtually all their profit growth. Overseas sales are made in the local currency: the euro, yen, renminbi, Australian dollar, Canadian dollar and so on, and the profits are stated in U.S. dollars on corporate profit and loss statements.
In 2002, 1 euro of profit earned by a U.S. global corporation equaled $1 in profit when converted to U.S. dollars. That same 1 euro profit swelled to $1.60 in 2008 as the U.S. dollar depreciated against the euro. That $ .60 of profit was phantom, an artifact of the depreciating dollar; it did not result from a higher production of goods and services or greater efficiencies.
This is why profits earned in non-U.S. markets have risen so dramatically even as domestically earned profits have stagnated. The U.S. dollar has declined dramatically against the currencies of our major trading partners, boosting phantom profits across the board when the non-U.S. profits are converted to U.S. dollars on corporate profit and loss statements.
. . .
The strengthening dollar is putting these vast phantom profits at risk. Were the U.S. dollar to return to its 2002 relative value in other currencies, virtually all the phantom (forex-generated) corporate profits that have justified the stock market rally will vanish.
There's more at the link. I strongly recommend clicking over to Mr. Smith's Web site to read the whole thing.
The reason this is important is that corporate profits are behind most of the 'good news' on the economic front. I (and many others) have pointed out for a long time that this so-called 'good news' isn't good at all - it's nothing more than window-dressing on a catastrophe. When these 'phantom profits', as Mr. Smith calls them, begin to disappear, there won't be any more window-dressing available. At that point, we'll be confronted with the stark reality of our present economic condition.
The question is: are our national leaders ready, willing and able to do anything about it? Or will they simply look around in desperation for something - anything! - to use as fresh window-dressing, rather than face reality and change their ruinous policies?
I think you know as well as I do what their response is likely to be.