Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

The Engineering of a Financial Crisis

Stock-Markets / Financial Markets 2010 Apr 08, 2010 - 07:03 PM GMT

By: Sol_Palha


Best Financial Markets Analysis Article"Nothing is more common on earth than to deceive and be deceived." ~ Johann G. Seume, 1763-1810, German Theologist.

The Dow continues to put in new highs but our 3 moving averages of new highs are trading well off the highs they put in last year. The 20 day moving average (current reading = 640) of new highs would have to surge past the 2500 mark to have a chance of putting in a new high. Based on this week's readings it would have to surge 400% from its current reading. It is very strange and disturbing that a market that appears to be strong is actually not as strong as it appears to be when one examines its internal structure.

V readings (our proprietary indicator that measures market volatility) have surged to yet another new high, we are now striking distance from hitting the 1600 mark. We cannot remember the last time when V readings put in 4 back to back new highs. In fact it appears that the surge (over 5.6%) in the past 4 weeks has set a new 4 week record.

Given the fact that the Dow has now put in a stunning 29 new highs and the volume has not once touched the 6.8 billion mark leads us to believe that some form of extreme manipulation is taking place. It is statistically impossible for a market to put in so many new highs on such low volume without something being amiss.

If one examines the history of the Dow (we have more than 100 years of history there), one will find that at any given point in time, the Dow trended higher on higher volume especially if it was putting in a series of new highs.

Before we proceed, we would like to list a few very important quotes.

"The budget should be balanced, the treasury should be refilled and the public debt should be reduced. The arrogance of Public officialdom should be tempered and controlled. And the assistance to foreign Lands should be curtailed, lest we become bankrupt." ~ CICERO, 63 B.C.

Thomas Jefferson the 3rd president of the United States made the following quotes and did his level best to curtail the power of banks

"The Truth is that we can never satisfy their (bankers) appetite for money"

"Banks of issue were more dangerous to the liberties of the people than standing armies and the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale"

"The power to issue money should be taken from the banks and restored to congress and the people"

President Jackson made the following statement in his farewell address "the banks of the United states waged war upon the people"

"It is one of the serious evils of our present system of banking that it enables one class of society - and that by no means a numerous one - by its control over the currency, to act injuriously upon the interests of all the others and to exercise more than its just proportion of influence in political affairs."

President Jackson killed the banks and restored the power to create money to congress. In his farewell speech (1837) he very clearly and openly stated the consequences that could befall a nation if the banks were allowed to take over? To read the full excerpt of President Jackson's farewell address click here

It is no secret that central bankers under the guise of trying to provide financial stability have been plundering every nation and manipulating the system to their benefit and to the detriment of the majority. However, things have now gone out of control. The following two facts should help provide support for this hypothesis.

The top 6 American banks have assets that are equal to 63% of U.S. GDP; let that figure sink in. Imagine that 6 banks have assets that are equal to 63% of the world's largest economy. Effectively they can manipulate any system. If one were to treat these banks as a nation they would be in the top 5 nations of the world. Power corrupts and absolute power corrupts absolutely. These banks will seek to gain even more control and will stop and nothing, unless their legs are chopped off.

The Top 6 banks are engaged in over 80% of all over the counter derivative trades.

Were not banks created to lend money and help business grow? So why are they using this money to trade the markets. When you combine these two pieces of data, it's all but obvious that the banks have a free role to do as they see fit courtesy of the Feds. The Feds are providing these banks with virtually free money and instead of lending this money out, they are simply pumping into the markets, setting them up for another monumental correction. The function of a bank is to lend money, not to trade; new laws should be introduced striping banks of their status if they earn more from trading then from their traditional business operations. Better yet they should be banned from trading the financial markets.

One could go even as far as stating the financial crisis was engineered to help create a few super powerful banks. It appears that this is the case for the banks have not lost any power, but instead we have fewer players with triple the amount of power.

These facts could help explain why the markets have simply continued to rise on vapour thin volume and why the precious metal's sector (Gold, Silver, Palladium, etc.) has refused to mount a strong correction in the face of a stronger dollar. Precious metals are the ultimate stores of wealth for they provide a hedge against the inflationary tactics central bankers employ to defraud the masses of their hard earned wealth via the silent killer tax otherwise known as inflation.

The Dow has put in 29 new highs and not once has the volume surged above the 6.8 billion mark. Take, for example, the latest high (Monday April 5th) volume was only 4.26 billion shares, half of what it was last year when the markets were rallying strongly between the months of March and July.

So why push the markets you ask when they have already made a ton of money? That's where power, greed and arrogance come to play. Remember the quotes we listed above. Why would they stop if they can push it to the limits, destroy the psyche of traders and set up what appears to be a perfect trap. What do we mean by a perfect trap?

There are billions of dollars in the bond markets and while long term rates are slowly rising they do not even come close to the potential gains many have locked in the past 1 year. Imagine if bond players were pushed to abandon the bond markets, how much money would flow into the equity markets. Once this occurred the bankers could start to bail out for the billions pouring from the bonds markets would sustain their selling into rallies. Once out they could then start to build up massive short positions and eventually trigger a monstrous correction/crash. This would in turn trigger a rush into the bond markets as traders looked for a safe place to park their money and so the vicious cycle would continue.

Read the book "The coming battle by Lorraine Walter". It is over 100 years old, and it explains how every recession, depression is actually engineered in advance. This is not hearsay it actually provides quotes showing how the bankers have done this in the past. You can purchase this book from our Book Store or by just performing a simple search on Google.

Some other factors to consider

The PPT (Plunge protection team has openly acknowledged its existence after hiding in the shadows for decades). This article provides some info on this topic. Full Story

The Fed is using every bogus excuse in the book to maintain low interest rates; the primary beneficiaries of this move are the big banks. They borrow the money for next to nothing (the average Joe cannot take advantage of this lovely feature) and then use this money to trade.

Our smart money indicator has remained in the neutral zone for months now. It sensed something was wrong and just moved into the neutral zone as it has refused to issue a sell signal.

Volume has always been important for it indicates market participation. Volume is shockingly thin and if it occurred once, or twice we could ignore it, but one cannot ignore the fact that the Dow has put in 29 new highs on sub standard volume; statistically, it is impossible to state that something is not amiss. Perhaps this is why our smart money indicator refused to issue a sell signal. This indicator has always astounded us for its ability to keep one on the right side of the markets. It moved into neutral territory and has remained there for several months. This was the very same indicator that issued an extremely strong buy signal in Feb of 2009 after remaining in the sidelines of an extended period of time.

The Baltic Dry index another leading economy indicator is well of its Nov 2009 highs; another indication that something is wrong.

If the Dow trades within or above the 10,999- 11050 ranges for more than 3 days in a row or closes above 11100 on a weekly basis, it could potentially trade all the way to 11,800.


There are many signs that all is not well.

Additional factors that also support the extreme market manipulation theory

  1. In March 2009, there were less than 6 sectors with a positive score; today every single sector (roughly 200) has a positive score and only 1 sector has a negative score. Even when the markets were crashing; there were at least 5 sectors that had a positive score, but today even the worst junk has moved up significantly, and we only have on sector with a negative score. This shows you how extreme the current environment is; even the worst Junk has rallied significantly from its March 2009 lows and yet not much has improved since March.

  2. Another very strong reason to keep the markets up is due to politics. The incumbent party does not want to lose its majority stake and a badly performing stock market on top of a terrible job market will be the fastest way to lose the top dog position. And as we all know by now most politicians are willing to sell their souls and those of others if they can for a price.

  3. Our special futures to equity indicator have moved even more in favour of the futures market. The current score is 67 for futures and 33 for the equity's markets. This is a risk to reward indicator, and it is now stating that the futures markets (which are very high risk markets) offer a better risk to reward ratio than the equity's markets. Generally, when it is in favour of the futures markets the difference has been very small, usually 1-4 points. This is the first time in decades where the point differential has moved past 15. This gives you an idea of the potential long term risk associated with the equity's markets now.

As we stated before power corrupts and absolute power corrupts absolutely. A few large banks now control almost everything (at least it where it matters the most for example the supply of money) and can at their whims generate another massive selling wave. In times such as these where inflation is on the rise, a massive currency crisis is just waiting to occur, and financial markets are racing to the extreme zones, the best way hedge/protection is to have a position in precious metals (Gold, Silver, etc.). Gold has stood the test of time, can one say the same for any paper currency. Let's not forget that the US has declared bankruptcy twice before. Those who forget history are doomed to repeat the very same mistakes again.

We will end with two quotes from the "The coming battle" by Lorraine Walter

"The greatest financial mistake of my life was in what I had to do with the passage of the present national bank act. It ought to be repelled; but before it can be done there will be such a contest between the banks on one side and the people on the other as has never been witnessed in this country". ~ Salmon P. Chase.

"fifty men in these United States have it within their power, by reason of the wealth which they control, to come together within twenty-four hours and arrive at an understanding by which every wheel of trade and commerce may be stopped from revolving, every avenue of trade blocked, and every electric key struck dumb. Those fifty mean can paralyze the whole country, for they control the circulation of currency and can create a panic whenever they will". ~ Chauncey M. Depew.

by Sol Palha

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of the market. He and his partners are on the web at

© 2010 Copyright Sol Palha   - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Louis Ruggiero
08 Apr 10, 20:42
Federal Reserve and Big Bank market manipulation

For the past year, this stock market rally has been an illusion. The Federal Reserve prints money, lends it to the big banks at .25%, and these banks, along with hedge fund managers, use this borrowed money to buy up the stock and bond markets (keeping interest rates down).

Think about it...a big bank borrows from the Fed at .25% interest, and then uses that money to buy US Treasuries at 3-4% interest. No wonder a treasury auction hasn't failed. No wonder the big banks are making money.

Will this fraud ever end? When is the Federal Reserve going to be audited? When are they going to be compelled to publicly divulge the banks who received the bailout money, and how much they received? Ben Bernanke and the banksters hold the U.S. and the world economies captive. As long as these shenanigans are allowed to continue, we will become more and more powerless to do anything about it.

Post Comment

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

6 Critical Money Making Rules