Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
FED Balance Sheet Current State - 5th Mar 21
The Global Vaccine Race Against Time and Variants - 5th Mar 21
US Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In Stock Market - 5th Mar 21
After Gold’s Slide, What Happens to Miners? - 5th Mar 21
Racism Pandemic Why UK Black and Asians NOT Getting Vaccinated - NHS Covid-19 BAME - 5th Mar 21
Get Ready for Inflation Mega-trend to Surge 2021 - 4th Mar 21
Stocks, Gold – Rebound or Dead Cat Bounce? - 4th Mar 21
The Top Technologies That Are Transforming the Casino Industry - 4th Mar 21
How to Get RICH Crypto Mining Bitcoin, Ethereum With NiceHash - 4th Mar 21
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

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.


© 2005-2019 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

6 Critical Money Making Rules