RSS

Lies, Part I: If Diogenes Returned, Could Truth Be Found?

10 Mar

[courtesy Google Images]

[courtesy Google Images]

ZeroHedge.com reported in “Ex-Plunge Protection Team Whistleblower: Governments Control Markets; There Is No Price Discovery Anymore’” that,

 

“One year after the great stock market crash in 1987, US President Ronald Reagan launched the ‘Working Group on Financial Markets’ . . . . [which came to be] known as the “Plunge Protection Team.”

Where the Working Group previously prevented sudden market falls (panics), it now also causes persistent market rises in order to instill public confidence in the markets, economy and government, itself.

However, according to Dr. Pippa Malmgren—a former member of the Working Group on Financial Markets—government manipulation of the markets has grown so ubiquitous and unaccountable that, there’s no price discovery anymore by the market . . . governments impose prices on the market.”

I think Dr. Malmgren is right.

The markets’ fundamental purpose is to “discover” the proper prices for various products, commodities and products at any given moment.  When we know something’s proper price, we can make informed and reasonable decisions as to whether we should buy or sell that item.  The result is the most efficient use of capital.

However, the free markets’ price discovery mechanism depends on markets running honestly.  Once government, Wall Street or whoever begins to manipulate market indices, the result may be a happy illusion that gives people confidence in their economy and government.  But that manipulation is also results in a price lie that inevitably deceives people into buying to selling at false prices.  Price lies cause the misallocation of capital, which causes confusion and inefficiency in the economy, which eventually causes the economy to collapse.

No matter how much President Reagan may have loved this country, his invention of the “Plunge Protection Team” may ultimately lead to our national decline and even destruction.

Lies matter.  Lies destroy and even kill.

Today, lies are so predominant in the US and global markets, that “there’s no price discovery anymore”—just price falsification.  As a result, we don’t know whether to buy or sell, borrow or lend.  That confusion will spawn mistakes that will ultimately grind us into poverty.

Our economies are dominated by lies.

 
2 Comments

Posted by on March 10, 2015 in Lies, Manipulated Markets, Values

 

Tags: , ,

2 responses to “Lies, Part I: If Diogenes Returned, Could Truth Be Found?

  1. Oliver Medaris

    March 10, 2015 at 11:57 PM

    Bleak is the color of my nation’s eyes in the morning…
    & day… & all through the night. sad

     
  2. palani

    March 12, 2015 at 6:59 AM

    Merchants constantly do sensitivity studies to maximize their profits. They don’t sell at their buying price because their goal is profit. When the government steps in to regulate anything they (merchants) create a BLACK MARKET. Think of the black market as being a free market where the price floats to a higher level because the activity is illegal. Note it is the activity that is illegal and not the substance. Governments regulate activities.

    Back to merchants. These sensitivity studies lead to some interesting discrepancies. I once held a job 150 miles away from home. I would leave at 4:30 a.m. If I got hungry early (30 miles away from home) I would get a sandwich at a fast food chain location for $.59. If I got hungry 75 miles away from home the same sandwich would cost $1.09. If I got hungry close to work that same sandwich would be $1.59. So about 300% difference in price for the same sandwich from the same fast food chain. I don’t think the merchants were lying but they were informing me that there was more prosperity where I worked than near my home.

     

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s