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Debt and Inflation Consquences of American Fear

Stock-Markets / Stock Markets 2014 Sep 27, 2014 - 12:42 PM GMT

By: Barry_M_Ferguson

Stock-Markets

Fear is defined by the ‘online dictionary’ as ‘a distressing emotion aroused by impending danger, evil, pain, etc., whether the threat is real or imagined’. America is in a permanent state of distress. America is in a permanent state of fear. Americans are, or must be, very fearful people. Why else would they surrender all their assets and all their liberties in exchange for some perceived protection?


That perceived protection is a standing offer from the Federal Reserve Bank and its puppet, the US government. Then Fed President Greenspan usurped powers when he spread the fear of the Y2K computer crash in 1999. Americans cowered in fear. The US regime usurped more powers as they imploded the twin towers in 2011. WTC7 (not hit by plane or anything else external) followed with what can only be described as ‘spontaneous implosion’.  Americans cowered in fear. They continued to scare americans with a boogeyman (Mr. Bin Laden) that wanted to kill everyone. Americans cowered in fear. Of course, when he died at the hands of a Pashtun war lord in 2003, there were more boogeymen introduced to the american public who were now cowering in a fetal position underneath their desks. Then Fed President Bernanke, after stating in 2008 that the threat of economic collapse had passed, usurped more power as he offered to save the economy of the world if he just had a few more legal options at his whim. Granted! Just keep the boogeyman away from us!

Security, real or perceived, is expensive. Now america is nearly $18 trillion in debt and completely addicted to Federal Reserve stimulus and manipulation. Americans are also addicted to the idea of military prevention of eminent acts of, well, terror!

What are the signs of america’s growing fear?

I saw a financial show a week ago on which a panel of supposed ‘financial experts’ were discussing the collection of personal data by the NSA. All agreed it was a good thing because none of them were doing anything wrong. Besides, the NSA was protecting them from the boogeyman. Idiots! Freedom and liberty from the american government is the very thing that once made america great. Americans live in fear.

When we go to an airport, we submit to being stripped or groped as if we were on a fourth date. Why? Americans live in fear.

The stock indexes were all reflecting the recessionary conditions of a few years ago. When Bernanke and Paulson offered to save investors, everyone quickly surrendered capitalism and free markets to kleptocracy and manipulation. More fear.

To the present, a report came out today that new home sales increased some 18% in August. That fabulous news lifted stock indexes around the world. Of course, as I have written numerous times, whenever we get a report that existing home sales were down in a month, we also get a report that new home sales were up for the same month. If existing home sales were up, new home sales were down. Now, what kind of mendacious, ridiculous, propagandist group comes up with this absolute dishonesty? What? Oh yes, there it is. The US Commerce Department released this data point on 9/24/14. Interestingly, KB Homes, a builder of such new homes that were selling like hotcakes according to the afore mentioned, and more accurate, DOPE (Department of Pathological Embellishment), said their sales were actually down during the third quarter. The only reason, other than grotesque, profound ignorance, that anyone accepts this obvious nonsense is that americans live in perpetual fear and cannot accept the truth.

Fences. Fences have always been used to keep out unwanted intruders. They have also been used to keep subjects of ownership from drifting away. All of the terrible places to live on the planet are lousy because of their overbearing, power-hungry, kleptocratic governments. These governments propagandize fear of everything to their subjects. If citizens try to flee, they will likely find themselves to be incarcerated by some kine of fence. Or, should they attempt to scale the fence, they will likely be shot. This is a good sign that the government in control can only maintain control with the threat of a gun barrel (to borrow form Mao). North Korea would be a classic example. Interestingly, North Korea’s regime tells its subjects that the rest of the world is about to invade and kill them. Fear.

Welcome to the new america. While the american regime lies to the public in the assertion that the Fed’s actions are not inflationary, the cost of renouncing citizenship is going up five-fold. The american regime is trying to prevent citizens from leaving. Fear is growing on both sides.

There is a growing fence line on the southern border of america. Most people think the fence is to keep immigrants out. Most likely, when it is complete, the fence will be there to keep citizens from fleeing.

There have been several high profile US corporations that have moved their headquarters to other countries. The reason is simple. The US has the highest corporate tax rate in the developed world. Corporations can save money by relocating to less taxing countries. Burger King is the latest example as they announced the purchase of a Canadian coffee company, Horton’s, and the relocation of their headquarters from Miami to Canada. The regime has responded by trying to impose penalties and restrictions on companies exercising free market intelligence. The US regime is trying to incarcerate corporations out of fear.

Governments represent citizens. Regimes represent their backers only. Governments that work for citizens help to foster a positive environment that attracts business. Regimes work for their backers and therefore foster a negative environment for business. Business and intellect tend to flee. Governments welcome the competition. Regimes try to thwart competition. Ultimately, regimes have to resort to incarceration techniques to keep their subjects from escaping. Clearly, the US is a different country than it used to be. It is a nation of fear.     

Panophobia is defined as ‘an abnormal fear of everything’. The US should consider changing its name to Land of Panophobia. American leaders all talk about boogeymen. They try to keep the public in a state of eternal fear. We don’t want the banks to collapse! We don’t want stock prices to fall and in turn hurt our IRA accounts! We don’t want some religious crazy to jump out from behind a bush and blow us up with a bomb! Russia is after us! China is stealing our economy! The borders are sieves! The military had to go back to Iraq and Syria to bomb ISIS! They are coming for us! Run hide! Boo!

Why all the fear? Simple. When paralyzed by fear, sheeple will grab on to anything that promises to save them. Therefore, the US regime has promised to corral the boogeyman. The US regime has promised to never ever never let another big bank or Wall Street firm fail. The Fed has promised to keep interest rates low forever since this supports bubbly stock prices. Everyone gets insurance. Everyone goes to college. Everyone gets fed. Stocks always go up.

But, there is a price to pay. The bill is coming due very soon!

Relax. There is nothing to be fearful of here. As I have written numerous times, the Fed has ‘calendarized’ the stock indices. Quarterly portfolio statements go out at the beginning of October that will reflect the returns of the third quarter. And right on time, here is the Fed.

The chart below is the Dow for the third quarter, 2014. The Dow is the black line. The other lines are the XRT (retail ETF) in gold, F (Ford) in blue), UPS in red, and XHB (home builder ETF) in green. As we can see, the Dow index has performed better than the components of the economy that make up the Dow. For the period, home builders are down. Ford, the car maker, is down. Retail is down. Even UPS, the company that brings our purchases to us, is down. How then, can the Dow be up? Simple. As the Dow tried to sell lower in September, it suddenly enjoyed a great rally from nowhere because of nothing. It is, of course, the end of the quarter. Of course there is going to be a stock rally. The Federal Reserve will see to it! We wouldn’t want to get an investment statement showing that stocks went down, would we? Lest we be more fearful. Therefore, we have surrendered capitalism along with our freedom and dignity to the Fed so the stock indices will rise to infinity! Fear. And, this article is posted with two more wonderful rally filled days left in the month of September. But, I can confidently post this article because I know one thing. The Fed will make sure that the Dow does not fall at the end of the month/quarter. Oh yeah, I also know that america has been stricken with perpetual fear. No one even questions a stock rally anymore. See the chart.


Chart courtesy of StockCharts.com
3rd Quarter, 2014
Dow in black, XRT in gold, F in blue, UPS in red, XHB in green

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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