The following report was originally published by Brandon Smith of Alt-Market.com
Though stock markets in general are meaningless and indicate nothing in terms of the health of the economy they still function as a form of hypnosis, or a kind of Pavlovian mechanism; a tool that central bankers can use to keep a population servile and salivating at the ring of a bell. As I have mentioned in the past, the only two elements of the economy that the average person pays attention to in the slightest are the unemployment rate and the Dow. As long as the first is down and the second is up, they aren’t going to take a second look at the health of our financial system.
Historians and economists often wonder after the fact how it was possible for so many “experts” and others to miss the flashing red lights leading into market implosions like that which occurred in 2008. Well, this is exactly how; within any casino there is an inherent bias towards false hope. Meaning, many people will invariably ignore all negative factors and past experience because positivism is more pleasant. Central bankers are keen to take advantage of this condition.
When observing from the outside-in, this attitude rings of desperation. Investors, with no positive fundamental data to turn to in the economy, have now been relegated to scouring press releases and speeches for ANY indication that the central bank might not take the punch bowl away as they have been doing slowly over the past few years. In fact, in most cases negative data has actually triggered spikes in equities because the assumption on the part of investors is that bad data will cause the Fed to second-guess its stimulus reduction policies. In this way, central bankers can, at least for now, fake-out investors with a simple word or phrase released in a strategic manner.
An example of this occurred last week as Fed Chair Janet Yellen threw investors and aglo-trading computers a bone with an admission (finally) that inflation (as the Fed measures it) may not be as strong as the Fed had hoped. Investors cheered. Their assumption now is that the Fed will not continue with its steady interest rate increases. But, if one examines the central bank’s past behavior this is a foolish assumption.
The Fed will indeed continue its interest rate hikes unabated, and here’s why…
The tone set by the central bank on interest rates has been overwhelmingly “hawkish” over the past six months. Minutes from the Fed’s June meeting mention a concern over stocks being “too high,” and the potential for “market risks.” Fed officials also cite concerns that markets have been ignoring rate hikes with blind exuberance. The Fed has continued rate hikes through 2017 despite a constant barrage of negative data, causing confusion in the financial world.
I covered elements of this deluge of bad data in my article ‘Peak Economic Delusion Signals Coming Crisis’.
First, it is important to understand that everything the Fed does and says publicly is highly calculated. When there is confusion surrounding Fed rhetoric, it is often strategic, not random. Yellen’s admission to the U.S. House Financial Services Committee that low inflation is a concern conflicts with numerous Fed statements made previously.
For example, last month Yellen surprised analysts with her claim that she “expects no new crisis in our lifetimes.” This is an extremely confident and hawkish sentiment on top of numerous other arguments in favor of interest rate hikes regardless of low inflation. Only weeks later, inflation is suddenly a concern?
Investors immediately interpreted Yellen’s mention of low inflation to mean that the Fed was backing away from its hard stance on rate hikes, as well as its pursuit of reductions in its balance sheet. What they completely ignored was the fact that Yellen also reiterated to the same Financial Services Committee the Fed’s intention to CONTINUE rate increases at the current pace.
The Fed has used this method of mixed messages before. During the lead up to the taper of quantitative easing, central bankers sent mixed messages to the investment world leading everyone to believe that the taper was a no-go. Investors, of course, celebrated, while many alternative analysts were patting themselves on the back for their prediction that the Fed would “never” taper QE.
In the midst of rising potential for interest rate increases, the Fed pulled a fast one on analysts once again. Citing growth concerns, Yellen bamboozled mainstream economists and alternative economists alike, sowing the seeds of assumption that rate hikes were going to fall by the wayside.
In every case, the Fed insinuated it had “doubts”, while at the same time stating that the removal of stimulus will march onward. This time will be no different. Interest rates are going up up up, and the only question is, how long will it take before market investors accept this as reality and equities crash in response?
I believe that Yellen’s latest pronouncement of “no new crisis within our lifetimes” is a signal that this reversal in the stock bubble will take place very soon. I am reminded immediately of these quotes from prominent names in the economic world just prior to the crash of 1929:
John Maynard Keynes in 1927: “We will not have any more crashes in our time.”
H.H. Simmons, president of the New York Stock Exchange, Jan. 12, 1928: “I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
Irving Fisher, leading U.S. economist, The New York Times, Sept. 5, 1929: “There may be a recession in stock prices, but not anything in the nature of a crash.” And on Sept. 17, 1929: “Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
McNeel, market analyst, as quoted in the New York Herald Tribune, Oct. 30, 1929: “This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
Harvard Economic Society, Nov. 10, 1929: “… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
Yellen seems to be echoing the bewildering rhetoric of past economic catastrophe; offering prophecies which she knows are false while purposely increasing instability through interest rate hikes. As I have noted many times, this is the classic modus operandi of the Fed. The Fed raises rates into economic decline and ignores all evidence that they are bursting a bubble they engineered — this is what they do.
During recessionary conditions in 1927, the Fed increased the money supply exponentially through open market purchases and a reduced discount rate, which many economists argue was a primary catalyst for the artificial liquidity that created the stock market bubble of 1929. Once the crash occurred and the depression set in, the Fed RAISED RATES and made matters worse (as openly admitted by Ben Bernanke decades later in 2002). The Fed thus prolonged the depression for years beyond the normal deflationary cycle.
Using history as our guide, central bankers like to conjure an environment of fiscal dangers, then they warn of those danger too little too late, and then claim ignorance of their own activities after the crash.
This is nothing new in our era. Former Fed chairman Alan Greenspan publicly admitted in an interview that the central bank knew an irrational bubble had formed, but claims they assumed the negative factors would “wash out.”
Once they are ready to allow their planned implosion to occur, the central bankers are more than happy to throw investors to the wolves. That is to say, the investment world’s optimism is only useful to the Fed for a time. If rhetoric and behaviors previous to the crash of 1929 are any measure, today we are only meager months away from a similar event. For further explanation, I outline in detail the reasons why the globalists would instigate a fiscal crisis in my article ‘The Federal Reserve Is A Saboteur — And The “Experts” Are Oblivious.’
I suspect that the central banks and the globalists that control them are hoping to bide their time in terms a complete equities crash in preparation for a geopolitical event — a distraction massive enough to draw attention away from the bankers and their culpability for any economic disaster. They certainly will not allow stocks to crash in a vacuum.
In conclusion, I would like to leave readers with a quote from Great Depression era Federal Reserve chairman Roy Young. Perhaps investors should consider that they are being duped by central bank ploys, and that they are useful idiots in a game designed to keep the public under control with fraudulent markets until the Fed is ready to pull the plug. When the crash takes place, the Fed will find a way to remove itself from any blame. In the meantime, make no mistake, the interest rate hikes will continue into next year and the Fed’s balance sheet will be reduced.
Addressing the Indiana Bankers Association, before the Stock Market Crash of 1929, Fed Chairman Roy Young had this to say:
“Many people in America seem to be more concerned about the present situation than the Federal Reserve System is. If unsound credit practices have developed, these practices will in time correct themselves, and if some of the overindulgent get ‘burnt’ during the period of correction, they will have to shoulder the blame themselves and not attempt to shift it to someone else.”
Originally published by Brandon Smith of Alt-Market.com
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speakin’ of bells, i think i hear one ringing….off in the distance….but it’s getting LOUDER as i write.
how exactly is the fedjul gubmint debt supposed to be financed when rates get over 4%?…..hint: it CAN’T!….which is why we HAVE to suffer a calamity. an idiot, perhaps even a congressman, could see this one coming………
I recently read a book on the merits of silver investing, it proved that a Mad Max scenario is just days away in amerika! I looked at when the book was published and it was in 1975 so collapse must be soon?
Yep Gandhi, Silver is climbing and some have called by the end of the year, silver trading at $20.25. Right now Silver should be at $26.40, if you consider the Silver to Gold Price Ratio. Its currently 76.26 near the high of 80, which is not normal. And should be down to 47 to 1 very soon. We got a $10 Upside with Silver per Oz to be within it normal trading price to be normal. Silver is way under valued compared to Gold. The ugly, red head step child snowflake, 35 and still living in the basement, kind of paper shorting scam. lol
We will protect the lie, because it is all we have☹️
POP!
The congress can issue its own currency. The government doesn’t have to borrow money from the fed banker cabal. The congress can create money out of thin air just the same as the fed does. Back over a hundred years ago. There where plantations and company’s that issued their own money, Script and tokens. And it wasn’t worthless because it was accepted at the company store. Tennessee Ernie Ford mentioned that he owed his soul to the company store in the song Sixteen Ton’s!
” And it wasn’t worthless because it was accepted at the company store. ”
Thats de-facto slavery were the fruits of your labor are not transferable and hence not yours. Under this condition one could never leave town let alone flee a country which is one measure of liberty.
Want to know what real money is, Take a Page from History.
I had read an old book called, “The Leading Facts of American History” written in 1890 by Montgomery
Back during the American Revolutionary War, When General George Washington and his Continental Army, after suffering various defeats, was held up on one side of the Potomac River at Valley Forge in 1777-1778, the opposite side of where the British were positioned and stationed. Washington’s men were beaten, tired cold and humiliated and about to abandon the Revolution. Washington had to quickly come up with a new plan, to somehow bring defeat and at least win a decisive battle to restore moral to his ranks. His men also have not been paid either, and the Continental Currency was losing value quickly, and the men had no interest in that paper currency to keep fighting. So Washington decided to restore faith in the cause, and ordered sacks of “Silver as Hard Currency” to pay the men and help keep his ranks filled. Sure enough he rounded up enough Silver to pay his soldiers in real hard Silver Currency to maintain his forces. With this simple move for payment, Washington also gathered up enough boats and devised his sneak attack on Christmas in the cold of winter to cross the Delaware and catch his opponents dunk and a sleep. Sure enough, Washington Crossed the Delaware River Christmas night, and the sneak attack was decisive battle and what led to a great victory.
So if you want to see how Real Hard Currency like Silver plays out in real life in SHTF, this is a history lesson to plant in your brains. When Push comes to Shove, people know what real money is. Paper currencies come and go and lose value depending on politics or inflation, Gold and Silver lasts forever and is real money. Silver saved the day in 1777, saved the Continental Army, saved the US Revolution and saved a Country. Any more questions about the value of Silver? Just refer to History, it’s in the archives.
They will go for QE for the next 20 years. They have to or the system will collapse. The Federal Reserves World wide are buying stocks. You guys really should go long because the Dow Jones will be at 50,000 in the next few years. Guaranteed or you money back. They have said it several times.
It’ll be like a black hole and suck everything into it that everybody has until the govt. has it all. Welcome slaves,your allowance will be in the mail…what little there is.
Famous last Bernanke words:
5/17/07: ‘We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.’
8/31/07: ‘It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions.’
1/10/08: ‘The Federal Reserve is not currently forecasting a recession.’
6/3/08: ‘The Federal Reserve will not monetize the debt.’ Fed buys U.S. gov debt and replaces it with credit to the banks holding the debt and holds the debt on the Fed balance sheet, creating dollars out of thin air.
7/20/08: ‘The GSEs are adequately capitalized. They are in no danger of failing.’
But then there IS this one:
“‘We are spending more money than we have ever spent before and it does not work… After eight years… we have just as much unemployment as when we started… and an enormous debt, to boot.’ — U.S. Treasury Secretary Henry Morgenthau, May 9, 1939
The elite fooled a lot of people for a lot of years. It was much easier for them to control the flow of information back in the day. I knew something was up in grade school. The words authority, expert, pillar of the community and philanthropy should be blaring red flags.
The markets have become a chart of the debt, as all money is created out of debt, and the creation on new debt IS UNSTOPPABLE!! Any correction beyond 5% is highly unlikely. US debt market must exceed MULTIPLES OF $75 trillion by 2050 in order to facilitate the $75 trillion shortages in social security and Medicade/Medicare. And guess where all the money goes thru??? All the new debt becomes net profit on the companies on the world stock exchanges. S&P 2,600 by XMAS, DOW 100k and S&P 25k by 2050. The only thing to stop the acceleration of debt would be the end of cheap oil or a mile wide obese actress err meteoroid taking out NAmerica, China/India or Europe. Even if you were to get a correction, in less than 2 years you would be seeing new all time highs. So all previous crashes and collapses DON’T MATTER ONE IOTA!! Don’t bet against the world central banks.
What sucks is they (The Fed- Private Corporation) can print money out of thin air in a few seconds, based on nothing, which you have to work all week, for that IOU paper. That’s called slavery, Keep you strapped down to the American Dream of Buy everything and more and then you are trapped deep in credit debt. You loose and they take all of your possessions either away. They Rob you of your productivity with inflation.
Get off all their Grids, in every way. Be self sufficient and debt free. Be self employed.
They were saying the same thing back in 2006 – Dow going up forever. The central banks pulled the plug back then and they’re doing it again. Anyone thinking that this fairy tale is going to continue is kidding themselves. The rest of the economy is failing, stocks are next. This time is not different from any other crash in any other country in the past. No central bank has ever been able to print its way to prosperity or recovery.
Opportunistic psychopaths.
US and Europe has made it that they can achieve 0% GDP growth just off the growth in new immigrants on entitlements and new credit card spending alone. — THAT IS THE REASON WHY THEY MUST SWAMP EUROPE AND THE USA. It is all to encourage growth by debt expansion… And there you have it, the truth!!
This read read like a mountain of mumbo-jumbo. Of course I know nothing about the stawk market.
Always shifting blame away from themselves, con artists that they are.
In Genesis, the devil tempts Eve, he doesn’t shove the apple down her throat.
This gives the devil the right to claim moral superiority.
Can you not understand. The devil will always blame the innocent schmuck.
You’re gullibility is justification for the devil’s contempt which makes exploiting you devilishly guiltless from the exploiter’s point of view. That is why the devil howls in outrage when the exploited curse him. And why the devil cries persecution when the victim fights back.
__ the stock market is rigged
__all the real money goes to that team of insider trading con artists
__everyone else gets fleeced
__ invest your money in something tangible like a real library, dictionaries, and encyclopedias, medical reference books, science, physics, philosophy, mathematics, English Literature, grammar, phonics, reading skills, writing composition, trades skills such as electrician, carpentry and cabinetmaking, plumbing and sanitation, transportation and mechanics, architecture and building construction, engineering, art, nuclear physics, typing, shorthand, foreign languages, chemistry, biology, medicine, dentistry, herbology, pharmacology, farming, animal husbandry, wine making, fermentation, cheese making, baking, cooking (American and international), sewing, shoemaking, spinning, dyeing and pattern making, making and using a loom, shearing a sheep (not being one).
__ this is just a start
__ every library deserves a beautiful globe
__ a nice desk
__a movable ladder (shelves to the ceiling)
__light
__magnifying glass
And You.
__
I have everything but the ladder. I don’t need it, as I can reach the ceiling and the top shelves of my library. Thousands of dusty old books full of information.
I also don’t have a globe. The countries change too often for me to spend ridiculous money on a nice globe. Maps will do fine. Sometimes new maps don’t show things that are still there, such as unused railroad right-of-ways, so old maps are necessary.
Got it, but don’t need the ladder. My Ethan Allen cabinets hold them quite nicely. I saved most all the children’s homeschool books. Many of them were printed before 1960. No new math here.
The globalists have a lot of control over the money, and they control it, using their means. The US dollar is the world currency and as long as the globalists own the world currency and the manipulation process, it will stay afloat. If China, Russia, India, South America get together successfully, they could change dominance.
1. If there were a lottery selection for political leaders for the USA, the Globalist could not control the politics. Define criteria, and then one knows when vetting is done, and the persons name is put in the hat, they can do the job. Randomness, keeps control random.
2. 5 year maximum government staff jobs, Never more. This includes all government jobs.
3. 100 employees per company, maximum, never more. This will allow paradigm shifts to enter into the market quickly. The boss will know all employees, and knowing the employees is good.
No company will be able to make it all, thus, all companies have to depend upon each other, standardized inputs, outputs, internals, and there will never be a large company crash, The economy will always be good, because of so many small companies will keep it going forever. No building products to break.
It allows people to get jobs easily, and there will always be work with this model.
4. A person must own a company and one person can own only one company. SPREAD the Wealth, Why are you big huge company owners such greedy pigs. Small companies lets every one have a change and it guarantees excellence across the country.
All the US Dollar is, is a piece of paper with a big Fat IOU printed on it, by a Private Corporation issued by a bank, and you slave all week for an IOU paper promise printed out of thin air? Biggest scam in the world. Demand from your Boss to be paid in Silver 1 Ounce Rounds for your labor. The see the look on his face, Priceless!!
Better yet, hand your boss a piece of paper with an IOU of a weeks worth of Labor written on it, and payable on demand, that he pay you immediately, with Silver.
Its no different than what they are doing to you in todays paycheck for labor world.
Its like writing checks they cant cash.
Demand anything of your boss and you will have a boot up your ass, then you can collect all of the wonderful benefits the Gov’t provides for the poor and disenfranchised. Boy, it would be a FT job filling out applications for ALL of those swell benefits awaiting you boss man 🙂
Fran –
What is your definition of a government staff job? Does that include the military?
Seriously? Another article on the impending crash of the stock market? This seems to be a frequently recurring theme to many of your stories.
Fuck you trent, Brandon KNOWS what he’s talking about you big fat troll. When you can’t feed your kids, do you hold a gun to someone’s head to rob them of food or do you get down on your knees and suck the come out of some guys cock to get a few scraps to keep the wolves from the door for a couple of days. Piss off fuckwad!!!