Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Fault Lines

Stock-Markets / Stock Markets 2011 Mar 19, 2011 - 11:35 AM GMT

By: Barry_M_Ferguson

Stock-Markets

Best Financial Markets Analysis ArticleWhat else can go wrong? In the last decade, investors have withstood a barrage of seismic catastrophes along fault lines of vulnerability.

Our political leaders have initiated military conflicts that were justified from prevarication and outright lies. It seems that all wars are fought on the foundation of a lie.


Our same political leaders have initiated legislation known as the ‘Patriot Act’ supposedly in response to manifested threats. It seems the ‘Act’ was nothing more than a surrender of personal freedoms of the citizens resulting in a functioning autocratic government. The bullying, belittling, intimidation, and humiliation at the hands of the power-emboldened government effectively imposed submissive behavior on the citizenry.

Our central banking system has served to promote the biggest bubble in history by employing the illusionary effect of wealth through real estate propagated by artificially low interest rates and non-existent standards of lending prudence. It seems the central bank is, as Andrew Jackson knew, an enslaving tool of the rich and a malicious plague to the poor.

Our elected ‘representatives’ (Congress) have betrayed the electorate in the face of manifested financial crises as they surrendered the citizens’ Treasury to the banking cartel to use as it wished. TARPs, TALFs, and POMOs entered the lexicon portrayed as programs that would lead to ‘economic recovery’. It seems instead, this betrayal of duty has led to a constant state of spiraling debt.

The US Constitution was written by the geniuses that were our forefathers and it was meant to serve as a foundation of our laws and individual rights. The treasonous Congress of the past decade have spent their time erasing those rights and subverting those laws so the plethora of lies told by government would not be exposed to the average citizen. When members of Congress walk by a statue or painting of Jackson or Jefferson, they should not even be allowed to cast their gaze upon them. Instead, they should affix their eyes to the floor and walk by their superiors in silent reverence. They are not worthy! It seems that when things get difficult, our laws and rights become problematic for a government dedicated to banking cartel servitude.

The stock market has been ravaged by the ineptitude and greed of the Wall Street banking crowd. Their derivative scam came unglued and threatened to vaporize the government banking system. The government threatened the citizens with everything from depression to catastrophe. Falling stocks and falling real estate erased vast wealth from the hands of the citizens. It seems that the wealth lost by citizens was claimed by the banker elite. Their balance sheets were restored and the bonus shower resumed. Bankers have again resumed record profits! Yet, the average citizen now makes less than the average citizen in 1971. The real beauty of capitalism is it is indiscriminate about punishment. Corporations that lie, cheat, and steal are pummeled into bankruptcy by a free market when fraud is discovered. It seems, however, that capitalism had to be neutralized when it threatened to wipe away the banker frauds.

Autocratic governments have been hoarding wealth and extracting it from citizens all over the world. Wealth concentration is only a problem when the citizens finally realize that their means are limited and their resources are rationed by the government that supposedly represents the citizens. So far, 2011 has been the year of riots born of disparate economics. It seems the citizens of every country are coming to the conclusion that their government does not represent them. The people are merely subjects. It is not surprising that there is a populous uprising across the globe.

And now we have earthquakes pummeling countries and citizens. The latest (March 11) is the earthquake in Japan. The human tragedy is horrible and I have no intention of minimizing the suffering in Japan nor do I mean any disrespect. However, investors must digest all news as it relates to investing. But the truth is this. All of these events are fault lines to investors. They are investment changing events. Let me explain.

Market based economies periodically have contractions. Free markets respond with bear markets. Central banks hate this idea because 1) they hate freedom, 2) they hate capitalism, and 3) they are arrogant enough to think they can better control economies and markets with their money printing machines. They have been orchestrating events since money was first issued to further their dominance and control. In the most recent decade, Fed Chairman Greenspan couldn’t let the bear market (that he brought on with bumbled monetary policy) of 2000 play out. There is a fair amount of evidence that the twin towers were brought down intentionally in part to cede more power to the Fed. They revived the economy with derivatives, free money, and credit that in turn, blew the real estate bubble until it burst. The Fed again assumed more power over the economy and the markets with  the Pelosi Congress surrendering sovereignty to the central bank. Again, the bear market in stocks was the key. The citizenry apparently no longer has the intellect or courage to face bear markets and therefore surrenders to anyone promising an eternal ascent in prices. Unfortunately, the citizens are too ignorant to know for what they ask. The only way to perpetually spiral prices higher is to welcome and foment inflation. Inflation is the only answer the central bank has for anything. It is their specialty.

So, to avoid bear markets in stocks and recessions in economics, the citizens have surrendered their power of price discovery, the virtues of capitalism, and ultimately personal liberty. The central banks have assumed total control and as each fault line threatened to bring down their ‘house of cards’, they expanded their power. Each fault line has been met with intervention, both central bank and government, the likes of which has never been imagined. Now, we must entertain, at least, if not accept, that the central bank controlled government has expanded the HAARP program to include earthquake events. There is plenty of evidence that I am sure most readers have already digested. It is rather odd that the twin towers in New York and the earthquake in Japan both occurred on the eleventh day of the month. It is also rather damning that the HAARP wave has been turned on before several recent earthquakes. Whether we want to even believe in the program or intent of the program, we must acknowledge that many people in the world blame HAARP for the earthquakes in Chile, Haiti, China, and now Japan. We must also entertain the idea that given the quest of central bankers to control everything, they might employ absolutely anything at their disposal to cement their goal. Every fault line that threatens to topple the stock market is just another opportunity for them to grow their power over us.

Let’s look at the central banker reaction to Japan’s earthquake tragedy. Again, the stock market is the key. Ben Bernanke had set off a stock rally with his QE2 announcement on September 1, 2010. The Dow had hardly stumbled until riots broke out across the Mideast and Northern Africa. When the rioting expanded into Libya, the price of oil finally looked poised to push high enough to produce a drag on stocks. The Dow began to tumble. Bear in mind that under control of the central bank in QE2 mode, the Dow has hardly put together more than two or three down days in a row before resuming its rally. But this time was different. Yes, oil was firmly over $100 per barrel but the entire commodity complex was rising to painful levels. Incredibly, even the greatest propaganda machine ever on the face of the earth, the US Commerce Department, admitted that food prices were rising. Although, I think they did say something like excluding everything that grows on vines or branches or roots, there really wasn’t any inflation. In addition, it was also becoming apparent to anyone with a functioning brain cell that any economic activity that seemed positive since March 8, 2008 (a major fault line - the introduction of TARP and bailouts for all the ‘too big to fail banks’) was due to government/ central bank stimulus. To make matters worse, some of these central bank knuckle-draggers were talking about ending all stimulus with the end of QE2 in June. So, another fault line had to be manifested.

This story is really about central bank control and not human suffering. The central bank doesn’t care about that. Their control is in their money that they issue in exchange for assets. They then devalue the currency and keep the assets. If they keep doing that until the currency is totally worthless, who wins? Yeah, I think we all ‘get it’ now! For instance, the central bank has used all the previous fault lines to develop the DTCC such that it clears derivative trading but also stock trades. If you don’t know, their name goes on the stock certificates that you buy with your money. They settled over a quadrillion trades last year alone. So, the key to the confiscation of assets is the currency. The central bank is not going to allow anyone to mess with their master plan. They have been devaluing the US dollar at a rather brisk clip of late and they need the Chinese and the Japanese to keep buying the US debt. Constantly increasing the debt works to devalue the currency. Of course, they also need brainless members of Congress to carry out the deficit spending that increases the debt but I think we all know they have that totally covered.

The Chinese of course started the SCO with the purpose of moving to an alternative currency of the US dollar. Suddenly, the world is having a terrible problem with earthquakes. Coincidence? The central banks are determined to peddle their currency. Paradoxically, the more currencies weaken, the more central bankers grow their power. The earthquake in Japan served to strengthen the Japanese Yen because the re-building process will require a lot of yen. Thus, yen demand is expected to increase. However, the yen had already been on a tear mostly because of the declining US dollar. Since Japan is, to a large degree, an export driven economy, a strong currency can hurt the economic growth. All modern economic growth is built on debt. So, the BOJ announced a record yen injection into the financial system. That didn’t work. So, surprise - surprise, the Federal Reserve and other G-7 nations announced an ‘intervention’ to help devalue the yen. We must ask a question: Why do central banks always work to devalue currency that they issue? The answer is, they want to exchange their currency for assets but they also know the economies that they control are crap. The only way to make crap more expensive is to make the currency that it is denominated in less valuable. There you have it.

As an investor, it is important to watch the Fed fault lines. I included a chart of the Dow so we can see the turning points (blue circles) from these fault lines. The chart shows the markets response to QE2 and if the Fed has its way, we might see a similar response to the great ‘yen intervention’. Of course, we should be mindful that the fault lines could lead to down trends. Nah. The Fed rules the world now - earthquakes, economies, and stocks! Every trend change comes from a central bank intervention. If the trends go down, we all might catch on to their scheme. Fault lines now give the central banks the excuse to turn the stock trends up.

 
8 months DJIA - blue circles are fault lines
Chart courtesy StockCharts.com

Barry M. Ferguson, RFC
President, BMF Investments, Inc.
Primary Tel: 704.563.2960
Other Tel: 866.264.4980
Industry: Investment Advisory
barry@bmfinvest.com
www.bmfinvest.com
www.bmfinvest.blogspot.com

Barry M. Ferguson, RFC is President and founder of BMF Investments, Inc. - a fee-based Investment Advisor in Charlotte, NC. He manages several different portfolios that are designed to be market driven and actively managed. Barry shares his unique perspective through his irreverent and very popular newsletter, Barry’s Bulls, authored the book, Navigating the Mind Fields of Investing Money, lectures on investing, and contributes investment articles to various professional publications. He is a member of the International Association of Registered Financial Consultants, the International Speakers Network, and was presented with the prestigious Cato Award for Distinguished Journalism in the Field of Financial Services in 2009.

© 2011 Copyright BMF Investments, Inc. - All Rights Reserved
Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented.


© 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