Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Masters of the Universe Are Also Universal Market Manipulators

Stock-Markets / Market Manipulation Jan 08, 2015 - 06:00 PM GMT

By: Money_Morning

Stock-Markets

Shah Gilani writes: Dear Wall Street Insights & Indictments Reader,

Just look at the market today, any market, anywhere in the world. They’re all higher.

That’s what happens when the true Masters of the Universe, the puppet masters at the U.S. Federal Reserve, twiddle the strings to manipulate markets for their purposes.


What are those “purposes” and how much “control” does the Fed really have?

The short answers to those questions will sicken and frighten you…

Market Eruption

But first, a word about surging equity markets.

U.S. markets leaped higher yesterday propelled by molten lava (heated by the Fed), which blew the top off the cone of equity malaise capping stocks in the first days of 2015.

Asian markets took notice this morning and immediately joined the party. Not to be outdone – and without a doubt the guests of honor who were being liquored up in the process – European stock markets popped their own corks and soared higher. So, when U.S. markets opened a few hours later, it was one for all and all for reaching for the moon.

Grab your glass and get your boogie on – it’s a world party!

The molten lava forcing the blow-off top in equities bubbled out of the Fed’s December 16-17, 2014, meeting minutes, which were released yesterday morning.

In a highly unusual public pronouncement (sure, they were minutes of the Fed’s private meetings, but they are made public, so they were public pronouncements), the Masters of Manipulation warned they were worried about slow economic growth outside the United States.

Specifically, the Fed said it was worried “foreign policy responses [to slowing growth] were insufficient.” That’s “Fedspeak,” over a loudspeaker screaming to their counterparts at every other central bank on the planet, for “PRINT MORE MONEY, YOU IDIOTS.”

But it’s not slowing growth the Fed is really worried about. It’s how artificially pumped-up equity markets (courtesy of the trillions of dollars of already printed money, aka stimulus or, more colloquially, quantitative easing) will react if the free-money ride slows down or stops.

How do we know that’s what the Fed is afraid of? Because it said so. The Fed minutes warned financial markets are “importantly influenced by concerns about prospects for foreign economic growth and by associated expectations of monetary policy actions in Europe and Japan.”

That means frenetic equity markets will crash if they don’t get more cocaine up their snouts.

That’s how Masters of the Universe pump up stock markets – by masterly manipulation.

So, what is their “purpose” and how much “control” does the Fed really have?

Unless your existence in the equity bubble has left you deaf, the Fed has for years openly articulated a “wealth-effect” policy. It wants to pump up stock prices to make us all feel wealthier. Some of us are wealthier, if we own a lot of stocks. Most of us don’t own enough stocks or any stocks, so we only feel the rich getting richer.

But, whatever, that’s the wealth effect.

As long as equity prices are rising, banks’ equity capital is worth more and they make more money in rising equity markets from investment banking, mergers and acquisitions (M&A), and trading.

Of course, the juice for all that activity comes from low interest rates.

At the same time, the Fed is carrying the deficit-ridden U.S. government by buying its debt.

That’s the purpose of zero interest rate policies (ZIRP) – to pump up equities, enrich big banks and monetize government debt.

That’s the purpose of central bank “stimulus” all over the world.

Control Fantasy

The problem is in the “control” mechanism.

If the Fed loses control of U.S. equity markets, if other central banks lose control of their equity markets, it’s game over. The wealth effect will disappear, and banks will collapse.

So, here’s what the Fed intended by incorporating the language it did in its most recent minutes, for the world to read.

The Fed warned other central banks to keep the free-money hoses turned on wanted in order to force equity markets higher by. Markets read that and rallied, because the Fed is the Master of the Masters of the Universe and just proved to its counterparts that stimulus is the way forward.

However, the last word on “control” goes to the markets themselves. Try as central banks might, as big as they are, as much capital as they pretend they have to spray on stocks, they are not anywhere near as big as the markets.

Control is a fantasy.

Of course, equity markets are higher. They’re all Pavlov’s dogs.

But one day, the atavistic tendencies of markets, meaning their animal nature, will prove the distorted headline “Man Bites Dog” was a misprint.

Source : http://www.wallstreetinsightsandindictments.com/2015/01/masters-universe-also-universal-manipulators/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 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