Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Stock Market Dismisses Doom and Points to the Road to Economic Recovery

Stock-Markets / Stock Markets 2012 Mar 03, 2012 - 06:10 AM GMT

By: Doug_Wakefield

Stock-Markets

Best Financial Markets Analysis ArticleOver the last 11 weeks, investors have enjoyed a continuing rising trend in equity markets. If the news pointed to rising tensions in the Middle East, higher cost at the gas pump, debt levels around the world that nations could not sustain, they were all dismissed. The road to "recovery" has spoken in "the markets".


On October 27th, 2011, I released the article Darwin's Deceptive and Dangerous Devices. That day, "European leaders expanded a bailout fund to stem the region's debt crisis", and headlines read "S&P 500 Extends Best Month since '74, Euro Rises". In less than 2 months, on December 21st, the leaders at the European Central Bank hit the electronic switches and handed out € 489 billion Euros ($639 billion) to hundreds of banks across Europe to "shore up the financial system". This was the largest a largest infusion of credit by the ECB into the banking system in the 13 year history of the euro currency. The last day of February, headlines read, "ECB Hands Out $712 Billion in Loans to Banks" and we learned that in a little over two months, more than € 1 trillion (€ 489 billion on Dec 21st + € 529.5 billion on Feb 29th) had been "pumped into Europe's financial system" in an "attempt to stabilize banks, governments and businesses".

$DJW (Dow Jones World Stock Index) INDX

Anyone capable of using the dictionary can find that "stabilize", according to Merriam Webster online, means:

"to hold steady as to maintain the stability of (as an airplane) by means of a stabilizer, or to limit fluctuations of (as in prices).

Now help me out. When a global stock index jumps 20% in 18 trading days in October, and then climbs 17% in 49 trading days over 11 weeks, have markets "limited fluctuations of prices", thus revealing "stability"? When one looks at the same index in 2011, we find that in 12 trading days the price declined 18%, and in 24 trading days it declined 15%. How can anyone look at these dramatic price swings, the longest taking place in a couple of months, and come to the belief that the actions of central bankers and photo opt summits by world leaders are taking place with the intent of "stabilizing" our lives and our global financial system?

$DJW (Dow Jones World Stock Index) INDX

National Debt Graph - 1940 to Present

Evidently, central bankers do not understand that the creation of billions to bailout problems that started in the millions, and trillions to bailout problems that started in the billions, can NEVER lead to stability. This is virtually impossible. And yet, the brainwashing continues.

"Let me begin by thanking the Federal Reserve Bank of Chicago for inviting me to participate in this important conference on the role of central banks in financial stability. As you know, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) assigned the Federal Reserve a central role in the new framework for achieving and maintaining financial stability." [Italics mine] Vice Chair, Janet Yellen, 11/11/11, the 14th Annual International Banking Conference in Chicago

During the two decades preceding the crisis, central bankers and academics achieved a substantial degree of consensus on the intellectual and institutional framework for monetary policy. This consensus policy framework was characterized by a strong commitment to medium-term price stability and a high degree of transparency about central banks' policy objectives and economic forecasts." [Italics mine] Chairman, Ben Bernanke, 10/18/11, The Effects of the Great Recession on Central Bank Doctrine and Practice, Boston

"Addressing a dinner late on Thursday (3/1/12) at an EU summit in Brussels, Draghi (ECB President) told the leaders of the ECB's provision of more than 1 trillion Euros of liquidity via a special loan program had only won them a temporary reprieve and there could be no let-up in reforms. 'It was a subdued message,' said one euro zone diplomat briefed on Draghi's intervention before the 27 leaders. 'He said there were timid signs of stabilization but emphasized that the overall situation was fragile.'" [Italics mine] Draghi Reportedly Says the ECB has done Its Bit, 3/2/12, CNBC

ECB Balance Sheet

Money Morning Australia, 2/23/12 before the 2/29/12 bailout

It is obvious from examining the charts above, that increasing debt and lot's of it, has been the long-term objective of central bankers the world over. To state "central bankers seeking stability" is an oxymoron. The growth of global debt for decades, and the parabolic growth of debt in the last 4 years to replace yesterday's deteriorating collateral from previous debt schemes, screams at any sane person willing to admit that the emperor's clothes have always been nothing more that debt creation to produce more exotic financial instruments that built a global house of instability. Until our universities, our politicians, our religious leaders, and our businesses stop treating these men and women as moral leaders seeking to bring "stability" into our world and lives, we will only see more instability. The smooth markets over the last 11 weeks have made many believe "more debt leads to higher asset values", never even considering the fact that whether prices move rapidly up or rapidly down over a month or two, the story is still the same...more instability. Until millions around the world wake up to the reality that a tiny handful of political and financial leaders are continually telling the rest of us they are bringing order out of chaos, our silence will only move us toward greater instability. Our individual lives continue to move away from stability, and more towards slaves of the state.

Remember, on Friday, September 19, 2008, the headline, Bush Asking for $700 billion Bailout stunned the world. On February 29, 2012, the headline had become, ECB Pumps a Fresh $700 Billion into Euro Banks, and we go about our daily lives as if this is the new norm of "stability".

Could it be, that we don't react to headlines regarding more massive debt injections by central bankers, the only individuals in the world that can make such an action take place, unless markets are caving in?

$INDU (Dow Jones Industrial Average) INDX

$INDU (Dow Jones Industrial Average) INDX

"Long before my election to the Senate I learned two things pretty thoroughly. One was, if you want to get rich - that is, very rich - in this world make Society work for you. Not a handful of men, not even such an army as the Steel Trust employs, but Society itself. The other thing was, that this can only be done by making a business of politics. The two things run together and cannot be separated. You cannot get very rich any other way." The Confessions of a Monopolist (1906) Frederic Clemson Howe, page 69

If you are interested in our most comprehensive research and trading commentary, consider a subscription to The Investor's Mind: Anticipating Trends through the Lens of History.

Doug Wakefield
President
Best Minds Inc., a Registered Investment Advisor
2548 Lillian Miller Parkway
Suite 110
Denton, Texas 76210
www.bestmindsinc.com
doug@bestmindsinc.com
Phone - (940) 591 - 3000
Alt - (800) 488 - 2084
Fax - (940) 591 –3006

Copyright © 2005-2012 Best Minds Inc.

Best Minds, Inc is a registered investment advisor that looks to the best minds in the world of finance and economics to seek a direction for our clients. To be a true advocate to our clients, we have found it necessary to go well beyond the norms in financial planning today. We are avid readers. In our study of the markets, we research general history, financial and economic history, fundamental and technical analysis, and mass and individual psychology.

Disclaimer:  Nothing in this communiqué should be construed as advice to buy, sell, hold, or sell short. The safest action is to constantly increase one's knowledge of the money game. To accept the conventional wisdom about the world of money, without a thorough examination of how that "wisdom" has stood over time, is to take unnecessary risk. Best Minds, Inc. seeks advice from a wide variety of individuals, and at any time may or may not agree with those individual's advice. Challenging one's thinking is the only way to come to firm conclusions.

Doug Wakefield Archive

© 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