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Trading Lessons

Federal Reserve - The Con, The Fraud, and The Lie

Stock-Markets / US Federal Reserve Bank Sep 20, 2013 - 11:00 AM GMT

By: Barry_M_Ferguson

Stock-Markets

What do we think of when we hear the words, ‘con’, ‘fraud’ and ‘lies’?

Correct! The Federal Reserve Bank.

The Con

The Chairman, Mr. Bernanke, paddled across the river Styx to address the nation over which he rules on Thursday, September 19, 2013. Since he and his associates had so clearly intimated over the last several months a reduction in the $85 billion per month bond purchase program known as ‘quantitative easing forever’, nearly everyone anticipated, and expected, an announcement of some reduction in the amount of those purchases. But alas, there was no such reduction. The Fed elected to keep the current rate of purchases in place until they were more comfortable with real signs of economic recovery.


How did the stock indexes respond? Of course, they went straight up. Welcome to the con. As anyone with a functioning brain cell knows, the economy is precariously weak and does not support rising stock prices. Sure, the top 5% of wealthiest Americans have recovered quite nicely from the recession while the bottom 95% are still losing ground. The housing market is distorted by foreign purchases, hedge fund purchases, and foreclosed sales. Not to mention, the supposed ‘shortage’ of inventory that the con men talk about surely doesn’t include all the abandoned homes throughout the nation that are not officially ‘on the market’. As far as employment, it is clear that workers continue to lose ground as all the supposed new jobs ‘created’ are part-time and the rest are conjured from the ‘birth-death’ ratio in which the BLS simply invents jobs to make the number look pretty.

As such, the Fed has to maintain the scam until they finish stealing all the assets of the US Treasury right out from under the noses of the profoundly ignorant american public. The Fed does this by driving up the stock indexes because many people still stupidly believe that the Dow Jones Industrial average is a barometer of economic activity. Nothing, and I mean nothing, could be any stupider! The Dow is nothing more than a Trojan Horse.

Witness, the Fed elected to maintain their current $85 billion in asset purchases because the economy in their view was still too weak to operate without a constant influx of monetary steroids. So, the Dow rallied nearly 200 points from its low of the day based on the idea that the economy was weak? What? No, the Dow does not move based on the economy. It moves because the Federal Reserve Bank moves it. Period! Their announcement on Wednesday surprised the investment world in part, because the Fed had led everyone to believe they were going to curtail asset purchases because the same Fed had said several times in the previous month that the economic numbers were getting strong enough to do so. Again, the Dow rallied because the Fed will keep injecting steroids and not because the economy is getting better.

Witness, the first chart below shows the Dow since the beginning of July. Since the Dow was making new all-time highs, the Fed began to feel confident that they could introduce talk of asset purchase reduction. The Dow crumbled in August. Obviously, the economy is still in real recession and cannot stand without chemical help in the form of Fed stimulus. Uh-oh!. If the downward trajectory of the Dow continued into September, investors would then get a quarterly portfolio statement in October showing a decline in stock valuation for the quarter. Then, even the dumbest american would begin to question the notion of ‘economic recovery’. Was it a surprise to anyone that the Fed went to work immediately at the very beginning of September so everyone’s third quarter portfolio statement would show a gain? Just to lock in that gain, the Fed elected to keep asset purchases at $85 billion. Surprise! Stocks rallied again! And yes, Abe Lincoln was wrong. You can fool all of the people all of the time. All you need is control over the stock indexes.

The chart below shows the con in all its splendor.

DJIA - 6/28/13 thru 9/18/13

Chart courtesy StockCharts.com

The Fraud

The following chart is a chart of the US dollar as represented by the USD. In my lecture from last year, I outlined why the USD would rise to about 87 and then roll over. It made it to about 85 and then the Fed started their ‘taper’ talk. To be clear, the Federal Reserve Bank has a singular goal. That is, they are a foreign private bank (yes, they have argued this point in the Supreme Court and won) with the goal of acquiring the assets of the US Treasury, over-throwing the US system of governance and sovereignty, and enslaving the unsuspecting populace. Check, check, and check. As long as the Dow keeps rising, no one cares and no one suspects a thing. That oat sack that is slung over our ears completely distracts us from the yoke that is getting locked in place over our shoulders.

Witness, at $85 billion dollars per month injected into the economic system of the US, the yearly tally is over a trillion. In other words, the Federal Reserve Bank is injecting the equivalent of 6% or so of the entire GDP of the entire country. In other words, take away that 6% injection and GDP would shrink by 4%! That my friends, is…, well…, Greek-like! What’s the difference between the US and Greece? No one is injecting 6% of Greece’s GDP into their economy.

Witness, all the nitwits that gather to question Mr. Bernanke at his post-con news conference. Not a single nitwit asked the most important question of the day. Mr. Bernanke, where does your foreign-owned for profit private bank get $85 billion US dollars per month to use to buy US assets? The answer is of course that they steal it. The Fed simply commands that the US Treasury hand it over. The US Treasury complies because, well people like Nancy Pelosi and John Boehner are guarding the printing press, and, they can’t refuse else we all have to face the truth. Heh, come on back. I didn’t mean to scare anyone with that ‘truth’ word. Sorry. This is amurika. I’m not sure if any of us are allowed to speak the truth anymore but I’m going to risk it. The point is this. Everyday the Fed buys assets, it buys assets with our money. That’s called stealing. This is also known as fraud. Why should the Fed discontinue their thievery? After all, they have now piled up over $3 trillion in US assets and before long they will have $4 trillion.

The chart below show the effect of this thievery on the US currency. As the Fed has done since its inception, they continue to devalue the currency and destroy the purchasing power of the suckers holding this paper. The last day on the chart shows clearly that the currency took yet another huge drop courtesy of Mr. Bernanke’s announcement. This dovetails nicely with the con of driving up the stock indices as a weaker currency inflates asset prices for things like the Dow.

USD -  6/2/13 - 9/19/13

Chart courtesy StockCharts.com

The Lies

Everything that comes from the Fed is a lie including the Federal Reserve Notes they pass off as ‘money’. But let’s look at one big fat lie.

Witness, Mr. Bernanke said in his press conference that the Fed conducted its operation to help the average citizen. Sure, he acknowledged helping his big bankster friends get richer but he was also concerned about helping the people on the lower end of the economic scale as well. You know, that would be the 95% of the populace that still can’t find an extra slice of bread to eat. The following chart is a chart of the price of gasoline. Poor people that are lucky enough to have a job of some kind go to work and have to pay for gasoline to get there. Look at the effect of the Fed’s decision on gasoline. The final trading day on this chart shows a quick spike higher in price. Oh goody! Thank you Mr. Bernanke for looking out for us poor people. Thank you for making gasoline prices rise. (The big spike at the end August was no doubt due to the alleged gas attack in Syria.) Yes, weaker dollars inflate prices in stocks and gasoline. Mr. Bernanke simply chooses to lie about the Fed’s real intent. They are not helping the poor people. They are killing the poor people.

Witness, some argue that holding down interest rates help poor people. Interest rates only play a part in housing and autos and those purchases are by choice. Food and gasoline are not purchases by choice.

Witness, Mr. Bernanke taught economics before he joined the Fed. Apparently, everything that he taught his students was a lie because the man obviously does not believe a single word in any economics book that he used. Why would anyone waste a dime to take a course that this man teaches? His answer to everything economic is the same. Steal money from the US Treasury and throw money at the problem. There - I just surmised everything that Mr. Bernanke knows about economics. Maybe I should teach economics too. It’s easy. We have been reduced to the con, the fraud, and the lie.

GASO -  6/2/13 - 9/19/13

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.

© 2013 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.


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Comments

1776again
21 Sep 13, 13:05
THE FRN IS THE ORIGINAL DERIVATIVE !

Please find this true version of the FED's behavior ever since its inception, as related by many, including many books that were written in the early 1900's. For instance: Senator Charles Lindbergh Sr., whose book the FED ordered to be destroyed; it was immediately gone by magic .

The Fed finances wars and war making, for which central banks are known historically. In particular, they have no problem killing their adversaries, as noted here concerning the FED from 1913 through the period prior to WWII, and continuing through today. Just substitute "trillions" for "billions" to account for the inflation when reading this. it will open your eyes and also make you thoroughly disgusted that such evil has been permitted, and now they have criminally infected the whole world for 100 years .

http://home.hiwaay.net/~becraft/mcfadden.html

"The Federal Reserve: An astounding Exposure 1934"

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