Best of the Week
Most Popular
1.US Dollar Crashes, Gold And Bitcoin Skyrocket As Economic Recovery Lie Is Exposed - Jeff_Berwick
2.Now Obama Warns Americans to ‘Be Prepared’ for Disaster… What Does He Know? - Jeff_Berwick
3.EU Referendum - Britain's Immigration / Migrant Crisis Explained - Nadeem_Walayat
4.EU Referendum - British People vs Establishment Elite, Vote LEAVE an Act of Defiance! - Nadeem_Walayat
5.Prominent Billionaire Investors Warn of Financial Crash, Quietly Position Themselves - MoneyMetals
6.Bankers Warn of BrExit Financial Armageddon if British People Vote for Freedom - Nadeem_Walayat
7.Bad U.S. Jobs Report Prompts Stocks Bear Market Rally Towards New All Time Highs! - Nadeem_Walayat
8.Gold And Silver – Friday May Have Marked A Pivotal Turnaround - Michael_Noonan
9.EU Referendum - British People vs Establishment Elite, the Illusion of Democracy and Freedom - Nadeem_Walayat
10.Felix Zulauf: Monetary Stimulation Creates Bubbles, Not Prosperity Nor Growth - GoldandLiberty
Free Silver
Last 7 days
Gold, Silver And PM Stocks Summer Doldrums Risk - 24th June 16
Here’s Why China “Economic Hard-Landing” Worries Are Overblown - 24th June 16
Jubilee Jolt: Markets Crash, Gold Skyrockets as Britain Takes Brexit - 24th June 16
BrExit Morning - New Dawn for Britain, Independence Day! - 24th June 16
LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - 24th June 16
Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - 24th June 16
EU Referendum Shock Results Putting BrExit LEAVE in the Lead Hitting Sterling Hard - 24th June 16
Final Opinion Poll Gives REMAIN 52% Lead, Bookmakers, Markets and Pollsters ALL Back REMAIN Win - 23rd June 16
Does BREXIT Matter? Outlook for Sterling - 23rd June 16
Keep Calm and Vote BrExit - Last Chance to Break Free of EU Superstate - 23rd June 16
Here’s the Foreign Policy Trump and Clinton Really Want - 23rd June 16
Details Behind Semiconductor Stocks Leadership - 23rd June 16
Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - 23rd June 16
BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - 22nd June 16
Proof that the Gold Bears are Wrong - 22nd June 16
Here’s a Trillion-Dollar Investment Opportunity for Those Few with No Debt - 22nd June 16
BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - 22nd June 16
Increase In U.S. Rig Count Will Not Cap Oil Prices - 22nd June 16
Are Copper and China Stocks Set to Rally? - 22nd June 16
SPX May Break Its Trendline - 22nd June 16
Believe it or Not: More Kids Live At Home Now than Since The Great Depression - 21st June 16
EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - 21st June 16
British Pound Outlook - BREXIT, Europe and You - Does your vote matter? - 21st June 16
Fascist Victory Behind the European Union - 21st June 16
EU Referendum Opinion Polls Analysis Shows Strong Momentum in REMAINs Favour - 21st June 16
Is It Time to Dump Gold and Buy Platinum? - 21st June 16
Could Central Bankers Be Gold and Silver's BIGGEST Allies? - 20th June 16
Words Still Mean Things – Brexit With Graham Mehl - 20th June 16
Baroness Warsi the Manchurian Candidate Quits LEAVE for REMAIN, Boris Johnson Next? - 20th June 16
FTSE Soars, Stock Markets Bounce on LEAVE Polls Surge, Bookmakers Widen BrExit Odds - 20th June 16
Brexit Would Trigger Devolution of Europe - 20th June 16
Stock Market Week Of Uncertainty - 20th June 16
Will Gold’s Bullish Price Chart Outperform Gold’s 5 Bearish Indicators? - 20th June 16
Bonds And Stocks At All-Time Highs: Are Markets Confused Or Broken? - 20th June 16
Silver Sleeping On the Job - 19th June 16
BrExit Odds Sink, REMAIN Polls Boost by Jo Cox Killing by Radical Right Extremist, Conspiracy? - 19th June 16
How Elliott Waves Tell You When to "Jump In" & When to "Jump Out" of Markets - 18th June 16
Stock Market Inflection Point During Bifurcation - 18th June 16
Gold And Silver – Insanity Is World “Norm.” Keep Stacking! - 18th June 16
Gold Stocks - Bull Markets that Follow Epic Bears - 18th June 16
The Fed Giveth and the Gold Bullion Banks Taketh Away… - 17th June 16
Brexit: "The Vote Heard Around the World" - 17th June 16
Gold Stocks Summer Breakout? - 17th June 16
Stock Investors Get Higher Returns and More Dividend Income - In Less Time With Less Risk - 17th June 16
How to Use the Gold-to-Silver Ratio? - 17th June 16
Inflation, Deflation & Associated Trading Prospects - 17th June 16
Overnight Markets Struggling to Stay Flat - 17th June 16
Gold Price Surges to Highest in Nearly Two Years On Central Bank and Brexit Haven Demand - 17th June 16
Stock Market Thinking Upside Down; Dow 18k Still Key - 17th June 16
Jo Cox MP Terror Attack Killing Claimed for "Britain First" - Witness Report - 17th June 16
Stock Market, Iron Ore, Bitcoin – Is Silver Next for Chinese Momentum Investors? - 16th June 16
EU Referendum Campaigning Suspended Following Shooting of MP Jo Cox, Suspect Named as Tommy Mair - 16th June 16
Why People are Migrating to the UK, Illegal Immigration, Housing Crisis Consequences - 16th June 16
Stocks Fluctuate Following Recent Decline - Bottom Or Just Pause Before Another Leg Down? - 16th June 16
The US Consumer-Driven Economy Has Hit a Brick Wall - 16th June 16
Bitcoin Price Going Parabolic Again, Now At $730 and Up 60%+ In Last Three Weeks - 16th June 16
China's Hard Landing Has Already Begun! - 16th June 16
Crude Oil Price - Oil Bears vs. Support Zone - 16th June 16
Central Bankers Are Wrong About Inflation and Deflation - 15th June 16
Alignment Of The Dow, Interest Rates, Debt and Silver Cycles Will Deliver A Fatal Blow - 15th June 16
Stock Market Bounce May be Over - 15th June 16
EU Referendum: Have the Bookmakers Got it Wrong? LEAVE Opinion Polls Lead - 15th June 16
Gold Price Rally - 15th June 16
How to Invest for Brexit Report - 15th June 16
Stock Market Short of the Decade? - 15th June 16
Stock Market Sell Off Coming! - 14th June 16
QE - The Good, Bad & Ugly - 14th June 16
This Demographic Shift Makes Our Social Security Useless - 14th June 16
Gold Stocks Ultimate Objective in a World of Monetary Transition - 14th June 16
Philosophy of the New World Order - 14th June 16
The Brexit Game - Boris Johnson vs David Cameron EU Referendum Zombies - 14th June 16
EU Referendum: LEAVE Opinion Poll Lead of 51% to 49% Whilst Bookmaker Odds Still Strongly Favour REMAIN - 14th June 16
George Soros Making Big Bets on Gold - 14th June 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

U.S. Economy Dancing On Quicksand

Economics / US Economy Jul 12, 2010 - 03:49 PM GMT

By: Bob_Clark

Economics Best Financial Markets Analysis ArticleDo not attempt to adjust the picture. We control the horizontal and the vertical.
(Old outer limits TV show intro)
 
Bernanke speaking to the heads of the reserve banks.


"Pssst, want to make a trillion dollars. We control government policy. We control fiscal and monetary  policy and we will tell you where we are headed with our policies.  They will be the opposite of what the majority is expecting.  We will change direction when the consensus is extreme and the other side of the trade is available so we can take on huge new positions. Then we will switch course.  It is risk free and the gains will be spectacular. They will help us survive this financial debacle."  Question from a bank president. "But what about the citizens Ben?" Bernanke replies. "To hell with them"

When the government is manipulable it gives new meaning to the concept of a contrarian trade.

We will all be rich

It used to be that only a few countries could be wealthy, the United States was rich because it had  became a manufacturing super power at the same time as it took advantage of third world countries by having it's multi national corporations, protected by the CIA,  drill for oil, strip off various minerals and resources and keep all the profits. Sure they would throw the local dictator a bone now and then and keep him in power but most of the cash ended up leaving the country. They operated a protection racket on the Saudis for example to get cheap oil.  Before the United States, Britain was the master of the world, through their military land forces and navy they brought the world to heel and basically pillaged it's resources.

Now the conventional wisdom is that everyone can be wealthy at the same time.  All we have to do is wait until China and India  grow into financial super powers then we all become rich. This at the same time that resources become rarer.  That is crazy talk, globalization floats on a sea of debt,  to me we are being sold a load of bull.

Lets double dip 'em

Things just do not add up, at least not if you are looking for benevolence.  The bailout has been mainly directed at the banks or the money has funneled down to them.   Is this new austerity idea an ongoing way to help the big banks make it through this crisis? It seems clear the Fed does not want it's reserve banks to lend to anyone unless the government is backing the loan.  The Fed is continuing to hold junk debt from the reserve banks and pay interest to otherwise insolvent banks, government money I might add. This is a clear effort to make banks profitable, risk free, at a time when lending money is clearly not a profitable business.  They are intentionally preventing the banks from making loans to the public and small business by paying out on deposits that are risk free.

Here's the thing, they could easily stimulate the economy by simply not paying interest on deposits held at the Fed.  This is a big, obvious silver bullet but it seems to me they are so fearful of economic conditions that they have no intention of using it.  A slow down will give even less reason to lend.  

There is an even darker take on what is happening.  It is that the Fat boys are using a weak President and a government full of hacks to swing the economy around and yo-yo the fundamentals that effect and stimulate the way money managers invest people's money.  They are doing it  after taking the other side of the all those money  managers trades and essentially stealing the money, with no intention of helping the little people on main street. Now in hindsight it seems clear the plan was never to restore prosperity but to swing toward austerity.  Keep in mind austerity is just another word for hard times.  That is why the banks were not lending. 

When you factor in malevolence things start to make sense.

The whole thing stinks. 

In hindsight the austerity plan has been known to the big boys for awhile, the bond market is starting to look like a replay of the stock rally from the March of "09" lows.

Again, it seems like they set it up and will now make it look like something else caused it. 

 
 
Neither borrower nor a lender be

The bankers are not Keynesian or Austrians or Globalists, they are greedy bastards, period.  They have developed what is essentially a fascist partnership with their government lackeys. They don't give a rat's asset about the people. Think about this, in a depression the banks that made high ratio loans should be out of business by now.  Are they?  No, in fact they are declaring record profits in many cases.  Ask yourself why. 

Could it be that they loaded up on stocks when everyone else was selling. Why did they do that at that time?  Could it be they knew the fix was in and huge torrents of cash were coming and  would be directed into equities? Talk about insider trading.

Now they have loaded up on government debt right on the lows as the worlds financial geniuses were saying that they were the short of the century, certificates of confiscation.  

The investment community has been sandbagged again. 

In the chart below I shifted the bond ETF chart over so the lows line up.  You can see how similar they are.  If you look at a recent chart of the SPY and line it up with the bond chart on a real time basis you will also see they were dumping stocks to roll into bonds long before talk of austerity, in fact they were doing it as Europe thrashed in potential death throes. Hardly a time to be thinking of austerity.

 

Contrary to popular belief.

Some financial web sites have reader counters that tell how many people have read each contributor's articles and I have checked my readership in the past.  I found it surprising that sometimes 5 to 6 thousand people had read a single piece I had written on just one site.  I have found that the more ominous or alarming my title the more hits it gets. That suggests that there is a dark cloud of fear and nervousness overhanging society.   It also shows that investors are searching for an edge, something that will help them make safe, profitable investments. It makes another thing crystal clear, most investors don't have a clue what they are doing.

Of course there are many readers that simply have an interest in economic matters and just enjoy reading and discussing these things but I think many are actually looking for help.

This is very disturbing because I read the same articles looking for strong commonality and consensus.  Then I look for trades going the opposite way.

If this austerity program  makes the banks stronger as the little guy goes under for the third time, I will not be surprised.

Remember Yo-Yos? The Fat Boys clearly do. Think as a contrarian, question everything you read, trust no one.

Bob Clark is a professional trader with over twenty years experience, he also provides real time online trading instruction, publishes a daily email trading advisory and maintains a web blog at www.winningtradingtactics.blogspot.com  his email is linesbot@gmail.com.

© 2010 Copyright Bob Clark - 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.


© 2005-2016 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

Catching a Falling Financial Knife