Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21
Why Tether USDT, Stable Scam Coins Could COLLAPSE the Crypto Markets - Black Swan 2021 - 6th Jun 21
Stock Market: 4 Tips for Investing in Gold - 6th Jun 21
Apple (AAPL) Summer Correction Stock Trend Analysis - 5th Jun 21
Stock Market Sentiment Speaks: I 'Believe' We Rally Into A June Swoon - 5th Jun 21
Stock Market Russell 2000 After Reaching A Trend Channel High Flags Out - 5th Jun 21
Money Is Cheap, Own Gold - 5th Jun 21
Bitcoin and Ravencoin Cryptos CRASH Bear Market Buying Levels Price Targets - 4th Jun 21
Scan Computers - How to Test New Systems CPU, GPU and Hard Drive Stability With Free Software - 4th Jun 21
Hedge Funds Getting Bullish on Gold - 4th Jun 21
THERE ARE NO SOLUTIONS When the Media is the VIRUS - 4th Jun 21
Investors Who Blindly Trust the ‘Experts’ Will Get Left Behind - 4th Jun 21
US Stock Market Indexes Consolidate Into Flagging Pattern – Watch For Aggressive Trending Soon - 4th Jun 21
Microsoft (MSFT) Stock Trend Analysis - 3rd Jun 21
No More Market Bloodbath – Beyond Cryptos - 3rd Jun 21
Bank run, or run from the banks? - 3rd Jun 21
This Chart Shows When Gold Stocks Will Explode - 3rd Jun 21
The Meaning Behind Gold’s Triple Top - 2nd Jun 21
Stock Market Breakout Or Breakdown – What Does The Next Big Trend Look Like? - 2nd Jun 21
Biden’s Alternate Inflation Universe - 2nd Jun 21
What You Should Know Before Buying Car Insurance - 2nd Jun 21
Amazon (AMZN) Stock Summer Prime Day Discount Sale - 1st Jun 21
Gold Investor's Survival Guide - 1st Jun 21
Silver and Copper to Benefit from Global Electrification Push - 1st Jun 21
Will Gold Shine Under Bidenomics? - 1st Jun 21
Stock Market Buy the Dip, Again?! - 1st Jun 21
Stock Market Consolidation Ahead - 1st Jun 21
Stock Market Summer Correction Review, Crypto CRASH, Bitcoin Bear Market Initial Targets - 31st May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Fraud Of The Federal Reserve Bank

Companies / Banking Stocks Aug 24, 2009 - 12:08 PM GMT

By: Captain_Hook

Companies

Best Financial Markets Analysis ArticleFar too many look for easy ways to get rich quick these days, only to be disappointed or shocked when reality bites in the end. Because of this there are no shortage of Ponzi like schemes characterizing the financial landscape, one by one being found out to be frauds, with Bernie Madoff at the top of the list in history thus far. The public was shocked when they discovered the size of the Ponzi scheme he was able to put together and perpetuate for so long, as usually, operations like this fall apart much quicker.


The following is a commentary that originally appeared at Treasure Chests for the benefit of subscribers on Thursday, August 13th, 2009.

Of course the reason for this was because a far larger Ponzi scheme of which the public remains oblivious enabled Bernie to maintain the illusion for as long as he did as it is at the very heart of our fiat currency based monetary system, that being the Fed. The Fed (and Treasury) have been issuing credit and printing fiat currency on an increasingly unhealthy basis for years now, since Nixon went off the gold standard in 1971, putting the US (and world) on the fiat currency system we find ourselves today.

In case you have not realized it yet in knowing this, it should also be understood that because US credit is issued in USDollars ($), that it too is a Ponzi scheme like bubble as well, to go along with all the other bubbles in stocks, bonds, and real estate. So you see, because of the Fed’s easy money policies all these years, the entire financial system is in fact a giant de facto Ponzi scheme, and that because the $ is presently the world’s reserve currency, the entire global economy has been built on this house of cards. What’s more, and like Madoff then, it should also be realized that although it could still take a few years, we are also coming to the point where the rest of the Fed’s Ponzi schemes will be recognized for what they are as well, with it’s fiat currency printing shenanigans central to the fraud. You should notice I do not use the term ‘fiat money’ when referring to what the Fed does because it does not print money. In order to qualify to be called money, whatever is being exchanged must hold some sort of recognizable value, which the $ does not in being fiat specie backed by a country that owes more than it owns.

So you see, it’s the Fed’s Ponzi scheme that’s the biggest and central, where they are now having to create copious amounts of new currency at break neck speeds in order for Peter to pay Paul in all the smaller Ponzi Schemes that are the result of the Fed’s unbridled printing presses. In knowing this, the next question that naturally arises is ‘how long can they keep this up’? In order to answer this question, one must first understand there is a difference in the Fed’s Ponzi scheme (and other central banks) compared to others, which is why it has gone on for so long. This difference lies in the fact it does not need to find a new batch of suckers on a regular basis to perpetuate the illusion like Madoff and the others must do in order not to get caught. No, all the Fed has to do is expand its balance sheet whenever needed (print currency), which in effect creates the cash flow it needs to feed all the smaller Ponzi schemes down the chain. This keeps everybody fed, which in turn keeps them happy, and maintains the illusion something of worth besides pushing a whole lot of paper around is actually happening.

Thus, in answering the question ‘how long can they keep this up’, appropriately, we must respond ‘far longer than a logical man might think’. This is of course because like Bernie, our self-serving bankers, bureaucrats and politicians will allow the deception to go on for as long as possible no matter how many are financially destroyed along the way, which is why an end to this insanity might be more violent than most are prepared for. And while it’s true the world still accepts the $ in exchange for goods and services, and in turn foreigners issue fiat currencies of their own they expect to be honored on the same basis, pressures are mounting in this respect due to rising prices and supply concerns that are largely created as a result of the mal-investments improperly allocated capital in fiat currency economies tends to sponsor. And again, while it may not happen today or tomorrow, put in simple terms, at some point the worthlessness of all these fiat currencies floating around will be exposed, having hit the limits of their own Ponzi scheme like limits, and trade will breakdown on a global basis.

Will this be the result / cause of war? Who knows? The only thing I know for sure is when this occurs, and because international trade will of course not completely break down, a new means of international exchange will need to be devised to replaced the fiat currency based system we have today, one based on a new trust. And as you may know if you are already well versed in these matters, history teaches us there is only one way to accomplish this, that being gold (and as process unfolds silver) backed currencies. This is when the intrinsic value stored in precious metals will be released. Counties, wealthy individuals, and the general public who have been ignoring the warning signs in this regard will be caught ‘flat footed’ and forced to buy at higher prices. Moreover, whether we arrive at such a point due to inflation or deflation it will not matter in real terms, as the purchasing power of gold and silver will endure either scenario given tight supplies, declining production, and the hoarding that will take place.   

Perhaps this is why longer duration precious metals charts continue to look attractive, because it just doesn’t matter. Obviously there are enough people out there that know once the Fed’s Ponzi scheme blows up the demand for gold and silver will literally explode overnight. All that has to happen in order to trigger this is a bank holiday in the States. This would turn the lights on for the ‘dazed and confused’. And all we need for this to happen is for the credit markets to begin freezing up again, which is in fact happening as we speak. In terms of who is the chicken and who is the egg within the formula, the credit markets are a function of the asset bubbles, and the asset bubbles are a function of the Fed’s ability to maintain the illusion it can create wealth. Once this illusion is shattered for the masses, which would happen in a bank holiday revaluation, even the dazed and confused will get it at this point and stop believing in the Fed and its worthless currency. Once the Fed looses the faith of the people, it will be all over for the usury and corruption that it represents, even though it would take time for radical change to appear assuredly.

That’s what I think will happen in the not too distant future based on the way things appear to be unfolding. Sooner or later the Fed will have used all the arrows in its quiver, as clever as they have been to this point. Increasingly, they will find it difficult to expand their balance sheet, especially if it’s to keep increasing monetization practices. They already have a healthy mortgage portfolio, now rivaling Treasury holdings, as can be seen here. What’s next – commercial loans, credit cards, and then more Treasuries as foreigners see this madness and react accordingly. What’s more, if the Fed begins monetizing more and more items (as the real economy continues to unravel), won’t this put its shareholders out of business? After all, the Fed’s primary purpose is to aid the banks in lending, not replace them because the public is broke. If this were to persist, how would banks increase their balance sheets, allowing them to stay in business? The scary part of all the supposed temporary actions on the part of the Fed is they are not temporary at all, and as process unfolds, one by one its member banks will be put out of business by the very actions it now hopes will re-stimulate an exhausted consumer / borrower. (See Figure 1)

Figure 1


 
And as you can see above, the bank index (BKX) may be very close to an important top, a top that could take the stocks of the Fed’s remaining members (Lehman Brothers is gone) down to what may appear as unimaginable levels at this point. If the count is correct, then both bank stocks (financials) and the broads (because financials are such a high percentage) have one more minor degree wave higher directly ahead before completing the corrective bounce (zigzag) off the March lows, potentially setting the stage for a higher degree move lower in the fall. It should be noted the longer stocks rally without a correction here the more bearish the prognosis moving forward no matter what Fedsters and their buddies down at the Treasury do to attempt stopping a slide later on. This is what I would expect to see if the rumors of a bank holiday in September were to become a reality, as the more overextended conditions get right now, the harder it will be to stop a collapse later on. And the problem this time around concerning a collapse is it could become profoundly systemic, which would make what may appear as ‘crazy talk’ above, very pertinent indeed.   

As for the Fed Statement yesterday, the bottom line is they are trying to make it appear the $ will go up by their design when they see fit (because they did not suggest monetization practices will be increased / widened/ extended), and not because they are losing control of credit conditions again. All I can say to anybody who believes this malarkey is ‘ I’ve got a bridge in Brooklyn for sale if you are interested’. What I mean here is they cannot control the imploding credit cycle, as evidenced in collapsing demand for loans of all varieties, so, in order to save face for as long as possible, and to make it appear they are in control, yesterday’s Fed Statement was worded to make it look like a rally in the $ was their idea, as will be the case when they reverse it. Right now they can ‘talk tough’ because people believe an inventory rebuild during the second half is coming and because demand for real estate loans has not collapsed. This is what they think could keep equities strong through the second half of the year.

The problem is the markets already know all this and could reverse lower anyway considering how overbought they are, not to mention valuations. In fact it would likely be the best thing for the bulls if this were the case temporarily, however whoever is pulling the strings behind the curtain (the Fed, Treasury, etc.) is so worried about letting a slide get started, which is apparently being measured by the S&P 500 (SPX) at 1,000 and NASDAQ at 2,000, that every effort is being made to keep prices above these levels no matter the damage to market internals and sentiment, not that these crazy people pay attention to such mundane considerations. This would get in the way of their plans for continued global domination and fleecing of the public. (i.e. via the Ponzi schemes.)

Perhaps the thinking is once prices get comfortably above these thresholds (SPX at 1,000 and MASDAQ at 2000), then a correction will be engineered. Right now they are attempting to have their cake and eat it too by keeping stocks buoyed while the $ tries to correct higher. This could prove a fatal mistake in light of the BKX chart above however, because if bank stocks top out here, so will the broads, and a potentially uncontrollable slide lower could ensue. It should be noted that although this would be at odds with our historical analog based comparisons (see Figure 1), such an outcome would fit the post election pattern well, where a big slide in September could turn ugly, lasting right through the fall and testing the March lows.

Again, it’s important to understand the longer this rally goes on uncorrected, the more bearish the ultimate outcome, making the rumor of real trouble in the banking system more probable sooner than later.

Good investing means gold investing to offset currency / systemic risks these days.

By Captain Hook

http://www.treasurechestsinfo.com/

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2009 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Captain Hook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in