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Category Archives: Free Market Manipulation

The “Pop” Heard ‘Round the World


Will Somebody Please Turn Off the Bubble Machine? [courtesy Google Images]

Will Somebody Please Turn Off the Bubble Machine?
[courtesy Google Images]

I have no doubt that the cornerstone of the New World Order (N.W.O.) is a debt-based monetary system.  I have no doubt that, if today’s debt-based monetary system were to fail, The Powers That Be would work feverishly to install a second, debt-based monetary system.  If the today’s debt-based monetary system (built on fiat- and/or petro-dollars) failed, the N.W.O. would seek to impose a “new-and-improved” debt-based system that might be built on Special Drawing Rights (SDRs).  These SDRs are nothing more than new debt-instruments issued by the IMF rather than the old debt-instruments currently issued by the Federal Reserve and other central banks.

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Economics: Mostly Math or Mostly Moral?


Institutionalized Injustice:  Fighting Over Unearned Wealth [courtesy Google Images]

Institutionalized Injustice: Fighting Over Unearned Wealth
[courtesy Google Images]

Financial Times:

 

“On Friday [Nov. 6, A.D. 2015] the Bank of Japan [BoJ] revised down its inflation and growth forecasts, and pushed back its expectation of hitting the 2 per cent inflation target to the end of next year. It seems likely, and indeed desirable, that the BoJ will be forced to expand its programme of quantitative easing [QE] before too long.”

QE is intended to cause more borrowing, more spending and more inflation in whichever country/economy that promotes it.  In the case of Japan, continued reliance on QE is strange since they’ve tried to use some version of QE for most of 25 years without much success.

Why does Japan continue to beat that dead horse?  Could it be because that’s the only horse they have?  Financial Times:

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Grandmaster Putin’s Golden Trap II


Chessmaster?? [courtesy Google Images]

Chessmaster??
[courtesy Google Images]

As I’ve written previously, Russian writer Dmitry Kalinichenko wrote an article entitled “Grandmaster Putin’s Golden Trap”.  I view that article as generally brilliant.  Here are some more of my comments on Mr. Kalinichenko’s observations.

 

Mr. Kalinichenko’s article focused on what he believed to be Russian President Vladimir Putin’s most brilliant financial strategy: buying gold with US fiat dollars.

On the face of it, that “strategy” doesn’t sound like much. Buying gold with fiat dollars?   It’s done every day. What’s so brilliant about that?

Well, the brilliance (or just common sense) behind Putin’s strategy is based on two fundamental premises:

 

1) The fiat dollar is significantly overvalued and thus able to purchase more than it’s really worth; and,

2) The price of physical gold has been artificially suppressed and is therefore far lower than its true price would be in a “free” (rather than “manipulated”) market.

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Fact or Fantasy?


[courtesy Google Images]

[courtesy Google Images]

Yahoo! Finance reported in “The $1 trillion reason why Bernanke’s critics were wrong,” that:

 

“Last week, NYT columnist Paul Krugman penned an ode to his former Princeton colleague. ‘And there but for the grace of Bernanke go we,’ Krugman wrote, reflecting on Europe’s economic morass.

“On Monday, Bloomberg wrote that Bernanke’s critics missed out on $1 trillion in potential gains in Treasuries since 2008. ‘The resilience of Treasuries represents a rebuke to the chorus of skeptics . . . who predicted the Fed’s unprecedented stimulus would lead to runaway inflation and spell doom for the bond market’.”

 

But how “resilient” are US Treasuries if nearly 90% of those sold since A.D. 2012 have been purchased at full face value by the Federal Reserve?

What would the price of US Treasuries be if those Treasuries were only sold on the free market and not on a market dominated and manipulated by the Fed?

The reason the Fed bought those bonds is because the free market would only agree to pay a fraction of the bonds’ face value. Rather than let the free market “discover” the true value of US bonds, the Fed intervened to overpay and thereby support the illusion of US Treasury value.

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Stock Market Irrelevance


[courtesy Google Images]

[courtesy Google Images]

After WWII, Americans increasingly invested in the stock markets. As a result, the American people came to view the stock market indices (DOW, S&P 500, NYSE, etc.) as reliable indicators of the health of our economy and even the value of the US dollar.

However, the Dow Jones fell 50% in the first 18 months after the onset of the Great Recession of A.D. 2008. This fall destroyed so much paper wealth and so much of the average American’s hope to profit from stocks, that large numbers of ordinary Americans began to lose confidence in, and drop out of, the stock market.

Several recent news reports verify this withdrawal and suggest some intriguing questions:

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America Damaged by Fed Economic Policy


After 100 years, you can't claim this persistent decline in value was an aberration, accident or anomaly.  It's INTENTIONAL and its POLICY. [courtesy Google Images]

After 100 years, you can’t claim this persistent decline in value was an aberration, accident or anomaly. It’s INTENTIONAL and it’s POLICY.
[courtesy Google Images]

MarketWatch.com a subsidiary of The Wall Street Journal recently published an article entitled “American is being damaged by low rates, weak dollar.”   If that argument is true, we might reasonably ask why is the Federal Reserve willing to “damage” America?

According to that article,

 

“Five years after the beginning of the economic recovery, after rock-bottom interest rates and trillions of dollars of quantitative easing by the Federal Reserve, the economy is growing about 2%.

No country has attained prosperity by printing money and weakening its currency, and the United States appears to be no different. Monetary stimulus might be useful in the initial stages of a recession and recovery, but zero percent interest ratesfor years on endare a different matter altogether. Under Fed Chairman Ben Bernanke and his successor, Janet Yellen, the dollar has fallen about 15% against the euro.”

 

But the euro’s value is also falling, so we’re measuring a falling dollar against a falling euro.  That measurement has to understate the dollar’s actual loss over the past six years.

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President Obama–Stop “Helping” Us!


[courtesy Google Images]

[courtesy Google Images]

A recent article in The New York Times (“Obama Will Seek Broad Expansion of Overtime Pay”) reports that,

 “President Obama this week will seek to force American businesses to pay more overtime to millions of workers, the latest move by his administration to confront corporations that have had soaring profits even as wages have stagnated.

“On Thursday, the president will direct the Labor Department to revamp its regulations to require overtime pay for several million additional fast-food managers, loan officers, computer technicians and others whom many businesses currently classify as “executive or professional” employees to avoid paying them overtime, according to White House officials briefed on the announcement.”

The rationale for this increase is probably the belief that if people’s incomes rise, they spend more and theoretically stimulate the economy.

But, on the other hand, if corporate labor costs rise, either corporate profits fall and/or prices go up.  If prices rise, the economy tends to slow.

So what will happen?  By raising some employee’s incomes, will we stimulate or slow the economy?

Answer:  That’s the wrong question.

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