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
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Mainstream Media Depression and Deflation Propaganda

Politics / Mainstream Media Sep 06, 2010 - 02:52 AM GMT

By: Howard_Katz

Politics

Cause and Effect - Best Financial Markets Analysis ArticleFanaticism has been defined as the policy of repeating the same actions while expecting a different result.  If that is the case, then we live in a society of fanatics, and it is absolutely essential to know this if one is to succeed in the financial markets.

In mid-September 2008, the New York Times began to scream, in a series of big headlines, that the nation was in a financial crisis.  I have studied the American media, and it is absolutely amazing.  The overwhelming majority of newspapers will pick up a line of propaganda from the Times and repeat it mindlessly ad infinitum.  After 2 weeks of Times propaganda the nation’s media had fallen in line, and in 10 days in early October the DJI fell by 3000 points (as the public read a large number of bearish articles about the financial system).


It is interesting to compare gold, gold stocks and conventional stocks from that period.  Over the years, even the establishment had come to admit a small role for gold, and by 2008 this was summed up in the policy of keeping 10% of one’s assets in gold stocks.

Therefore, when the “crisis” hit, ordinary followers of the establishment were faced with a dilemma.  They were getting margin calls on their 90% of ordinary stocks.  What to do?  What to do?  The margin clerk does not take “no” for an answer.  He just sells you out.

“Well,” the establishment follower thought.  “Stocks just don’t go down.  I can’t sell my stocks.”  So he sold his 10% gold stock position to protect his conventional stocks.  Thus gold and gold stocks fell sharply for a brief period at that time.

What was the result?  By March 2009, the DJI had fallen by more than 50% from its October 2007 peak.  Gold itself fell 30% from July to October.  It recovered its old high by February 2009 and is now an additional 25% higher.  The HUI recovered its late 2008 decline by early December 2009, which is where it rests today.  Today, the DJI is down 25% from its ’07 high, gold is up 25%, and the gold stocks are flat.  So the establishment followers managed to dump their 10% gold stocks at a panic low.  They did not get the protection which gold offers to you and me.  They are losers every which way.

This teaches us that it is not gold or silver, per se which ensures protection against the attempt by the establishment to rob us.  It is a study of that establishment, a familiarity with its economic theories and a knowledge of its tactics which can confer that kind of protection.  The idiots who accepted the theory that putting 10% of their money into gold stocks would protect them were looking for a simple answer.  They did not try to understand the cause of the problem, and the result was that they were destroyed.  Gold (or silver or gold stocks, etc.) is essential, but equally essential is the knowledge of cause and effect.

It is very tempting to see this as a battle between good and evil, and indeed there is a moral aspect to it.  (Thou shalt not steal.)  But the evil guys are not attacking the good guys (us).  Indeed, we have an immunity from them and are capable of actually making money off the depreciation of the currency.  The evil people in the establishment are making their profits at the expense of their own followers.  It is not evil versus good.  It is evil versus evil (sort of Nazi Germany versus Soviet Russia on the Eastern Front during WWII).  This is a subtle point, and most people will miss it.

Let us take the American black community (most of it).  It is well known that the large majority of blacks vote Democrat, and it is widely believed that blacks are a major beneficiary of government jobs and handouts.  But then I stumbled across a rather astonishing fact.  Studying the unemployment statistics in the U.S. by race I came across the fact that, according to the Bureau of Labor Statistics, in 1940 (the first year in which the figures were broken down by race) black unemployment was almost the same as white.  Today black unemployment is regularly double white.

How can this be?  Haven’t you heard all those stories about the Civil Rights marchers chanting and singing?  Can’t you read those anti-discrimination notices posted in every workplace in the nation: “DISCRIMINATION BY RACE, RELIGION OR BLA, BLA, BLA IS ILLEGAL.”  Well, it may be illegal, but there is one heck of a lot of it going around.  Right now, unemployment among black teen-agers is approximately 40%.  Many of these unemployed teen-agers get into trouble from their idleness.  Many of them get into drugs and wind up in jail.  The crime rate among American blacks is 8 times that among whites, and most of this is blacks murdering and stealing from other blacks. 

Or we can study the union movement of the 1930s and ‘40s.  It had been normal in the late 19th and early 20th centuries for the average American worker to increase his real wages by 60% over a generation (30 year period).  After the New Deal was elected and adopted supposedly pro-labor policies, this went down to 40% for the 1942-1972  period.  Then after the Republicans accepted those “pro-labor” policies, real wages topped out in 1972 and have been declining ever since.  So the big “accomplishment” of the New Deal was to cause the wages of American labor, which had been rising since 1623, to go into decline.  This is the first generation of Americans to be poorer than its fathers.

And again, we see the same thing with regard to the feminist movement.  What benefits accrued to women from the “woman’s” movement of the late 20th century?  Well, they won the “right” to go into combat; so that America is now the only country in the world which puts its women into harm’s way.  They elected a rapist (Bill Clinton) to be President of the U.S.  Their husbands divorce them.  They find themselves in middle age struggling to do the woman’s job of raising the children and the man’s job of earning a living.  They are hassled and harried.  Many times they are abandoned in their old age when they have lost their youthful beauty (e.g., Mia Farrow, who was abandoned because her boy friend took up with her own daughter).  Prior to the rise of modern feminism, American men stuck by their women.  Love, not sex, conquered all.

In all these cases, it is the supposed beneficiaries of the establishment who are its victims.  Indeed, it is my heartfelt advice to all of you that; if the establishment ever comes out in favor of a group to which you belong, then fight them with all of your might.  And this is true with regard to economics.

The people who lose money from the system of “legalized” counterfeiting are those who give their consent to it.  They may take a college course in Keynesian economics and believe the professor’s line.  They may read a popular newspaper and believe the editor’s line.  They echo the propaganda from the Fed.

I refused to take any economics courses when I was at Harvard because the professors there said that the Federal Government did not have to balance its budget.  Even at that young age, I knew that this was gobble-de-gook.  When I graduated college, I found some economists who made sense, and I began to explore the subject.  These were of the Austrian school, which begins with classical (Adam Smith) economics and adds to it the time preference theory of interest.

The time preference theory of interest says that interest is the price we pay for time.  We pay interest when we want a good sooner than we can earn the money for it (such as an auto loan).  We receive interest when we produce a good but then refrain from consuming it for a period of time (allowing someone else to use it).  Since stock prices are very sensitive to interest rates, Austrian theory can use the Fed’s policies on interest rates to predict the stock market.

For example, the Fed is now easing to beat the band.  When I look at the grand cycle (20 year) trend, I see a stock market which is very overbought and vulnerable to correction.  But since the Fed is in a very powerful easing mode, I am predicting that the stock market will be up for the foreseeable future (until the Fed tightens).  Despite this, I prefer gold and gold stocks to conventional stocks because gold is still near the beginning of its rise from its very oversold level of 1999.

I first began using Austrian theory analysis in 1969 and predicted the bear market of that year.  Defining a major term trend as 2-4 years I caught every single major term stock move with one exception.  (A second “exception” was the bear market of 2002, which was caused by the Iraq War but which I was able to predict.)  So here I have been calling the markets for 40 years, beating the pants off the establishment.  I predicted the giant grand cycle bull market in stocks which began in 1982.  I predicted Black Monday, October 19, 1987.  I predicted that there would be no “Great Depression of 1990.”  And I predicted that 2007 would be the grand cycle top for the stock market.

In other words, the people walking around with economic titles ten inches long are a collection of phonies and frauds, and there is more economic knowledge in my little finger than they will ever see in their lives.  They were hired, not by the university to teach its students, but by the paper aristocracy to excuse away its counterfeiting of money.  (For example John Kenneth Galbraith was hired by Harvard in name only.  He was actually hired by the Manhattan Bank and spent his life defending their privilege to create money.)  This amply compensated them for the money they “donated” to fund his chair.

This establishment not only lies to us, they tell the same lie every time.  The funny thing is that they only have one lie, and it comes from Franklin Delano Methusela.  It says, “We’re in a depression [deflation, great recession, etc.].”  This is bad.  Therefore the Fed has to print money to get us out of the “depression.”  Printing money makes us rich.  Printing money is the road to plenty.  (These theories were advocated by two Americans, William Trufant Foster and Waddill Catchings, who wrote a book, The Road to Plenty, arguing that printing money is the road to plenty for a society.  This book was later plagiarized by John Maynard Keynes, and its theories are today known as Keynesian economics.)

This week my newsletter, the One-handed Economist (dated Sept. 3, 2010), features a chart of silver on p. 1 showing a breakout from an ascending triangle.  This is one of a number of triangles in the precious metals group which are on the verge of breaking out and which have amazingly high price objective lines.

Every time we get the “deflation/depression” propaganda what happens in reality is the exact opposite.  There is a massive increase in the supply of money, and prices accelerate to the upside.

Here is the most recent example.  In Sept. 2008, there was a spate of “deflation/depression” propaganda.  It started with the New York Times, and measured by the size of headlines it ranks close behind the two biggest events of the 20th century, the Moon landing and Pearl Harbor.  (Except both of these events received big headlines for one day.  The “financial crisis” kept being resurrected every few days for 2 weeks.  These lies were used as the excuse to print massive amounts of money (represented by the monetary base because the Fed is lying about the money supply).  What will happen next is a rough doubling in U.S. prices starting with commodity prices, then moving to producer prices and finally consumer prices.  This is a simple example of cause and effect.  Gold, and the other precious metals instruments will lead the way.

If you want to subscribe to the One-handed Economist, visit www.thegoldspeculator.com and press the Pay Pal button (cost $300 per year).  Or you may subscribe via U.S. mail by writing: The One-handed Economist, 614 Nashua St. #122, Milford, N.H. 03055 and sending in $290 ($10 cash discount).  Thank you for your interest, and look out for profits ahead.


© 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