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The Fed Has Set the Stage For a Stock Market Crash
The Fed has created a very dangerous situation.
Ever since 2009, anytime the markets came close to breaking down, “someone” (read: the FED) has stepped in a propped the markets up.
In 2010, the S&P 500 staged a death cross, where its 50-DMA broke below its 126-DMA (the half year moving average). Stocks were in a perilous state with the 2008 Crash still in everyone’s short-term memory.
The Fed stepped in, hinting at, then all but promising, and then finally launching QE 2 in July, August, and then November, respectively.
This set off a rally in stocks that lasted until the EU Crisis erupted in full force in 2011. Once again stocks staged a death cross. And once again, the Fed stepped in with promises of action followed by the announcement of Operation Twist in September 2011. Stocks took off and we were back to the races.
Which brings us to 2012. Europe was really going down in flames. Greece, then Portugal, and even Spain were lining up for bailouts. And the bailouts were getting larger by the month with Spain requesting €100 billion in June 2012.
ECB President Mario Draghi promised to do “whatever it takes” to hold the EU together. But the carnage was spilling over even into US markets. So Bernanke’s Fed promised yet another QE program, though this new program would be “open-ended” in June.
Sure enough, Bernanke unveiled QE 3 in September 2012. He then upped the ante, unveiling QE 4 in November 2012.
Stocks took off again, launching one of the sharpest, strongest rallies in history.
This same madness continued despite the Fed ending its QE efforts. In October 2014, the markets took a nosedive to critical support. This time around rather than launching a new monetary policy, Fed President Bullard stepped out and hinted that the Fed should consider postponing the end of QE (a mindless statement given the Fed had only $5 billion in QE left at the time.
Logic aside, the markets took the hint and erupted higher again.
We even got another round of this in August-September 2015 when the markets collapsed. Almost immediately various Fed Presidents began calling for Negative Interest Rate Policy (NIRP) or launching more QE.
In simple terms, the Fed has completely conditioned the markets to believe that NO MATTER WHAT stocks will be held up. The Fed is entirely market dependent in its actions and policies.
This has worked fine thus far… but eventually it will fail, just as all market props do. The Fed cannot end the business cycle nor can it push stocks up indefinitely.
Gauging when this will happen is impossible as we are now talking about crowd psychology, not market fundamentals or economic data (neither of which have mattered for over five years).
However, the fact remains that all bubbles burst. This bubble will be no different other than the fact that it was in fact been the FED that created and perpetuated it long after it normally would have burst.
Put another way, when the next crisis hits, the Fed will effectively be out of ammo as it will be a crisis of faith in the Fed. Whenever investors themselves begin to comprehend that the Fed is now more leveraged than many of the investment banks were when they went bust in 2008, the End Game will begin.
Smart investors are preparing now.
We just published a 21-page investment report titled Stock Market Crash Survival Guide.
In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.
We are giving away just 1,000 copies for FREE to the public.
To pick up yours, swing by:
https://www.phoenixcapitalmarketing.com/stockmarketcrash.html
Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research
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high gas prices caused last crisis. what did media ignore, not wall st not housing bubble not 9/11 they just never mentiopned how 4 dollar gas prices caused meltdown. what are necessities, food and energy and it's all based on oil.
The Federal Reserve Board is the single most significant institution representing how civilization is controlled by being able to back up lies with violence.
The Federal Reserve Board is the most extreme particular example of the ways that the political economy is based on governments enforcing frauds by privately controlled banks, despite that such enforcement never stops those frauds from still being false. The degree to which the society we are living in is based upon FALSE fundamentals is far GREATER than almost anyone who was living INSIDE of those Wonderland Matrix Bizarro Worlds tends to be consciously aware of, due to the degree to which they mostly take that for granted, and have done so for generations.
THE BASIC WAYS THAT CIVILIZATION THINKS ABOUT "ECONOMICS" ARE AS ABSURDLY BACKWARDS AS THOSE COULD BECOME! Those ways of thinking were built into the dominate natural languages and philosophy of science, to the degree that almost everyone necessarily thinks and communicates in ways which are expressions of dishonest hypocrisies, to such an awesome degree that there are pretty well NO politically possible ways to get out of the currently established vicious spirals of POLITICAL FUNDING ENFORCING FRAUDS, constantly making the fundamentals become ever more FALSE.
Neolithic Civilization, of which the Fed is merely the single most salient symbolic institution at the present time, has trapped itself inside of its fundamentals actually being enforcing frauds, the falseness of which sociopolitical systems have been pumped up and UP by prodigious progress in physical science, which has enabled technologies that are trillions of times more capable and powerful to end up being primarily channeled into bigger lies backed by more violence.
It is indeed correct to state: "The Fed has created a very dangerous situation." However, that situation is orders of magnitude more dangerous than we are currently able to fully comprehend, due to the facts that the real fundamentals are based upon the ability to enforce frauds, which can be socially successful in each short to medium term increment, while the longer term consequences are that civilization overall becomes more psychotically insane, in proportion to how out of touch with relatively objective realities that society becomes, due to becoming almost totally dominated by professional hypocrites, who have adapted to be personally successful within social systems based on continuing to back up lies with violence.
The Fed has created a very dangerous situation to the degree that the Fed is the leading edge of the overall situation that civilization is controlled by governments enforcing frauds by private banks, which is spinning more and more out-of-control due to the ways that being able to enforce frauds never stops those from still being false. The FUNDAMENTALS are that the Fed is dominated by professional hypocrites, which can not get out of their frame of reference enough in order to recognize what they are really doing, because they cannot admit and address the deeper issues regarding how and why the political economy is based upon governments enforcing frauds, and therefore, the Fed can not publicly respond to the underlying problem that enforcing frauds never stops those frauds from still being false.
Any Stock Market Crash will be due to the underlying cause, that enforcing frauds drives the political economy to become increasingly psychotic, in the sense that that the falseness of those frauds becomes more and more out of touch with relatively objective realities. Of course, the Fed is NOT publicly able to recognize that is the source of the problems, because the ways that the government enforces frauds is the source of the public money supply drives every aspect of the economy to become more and more psychotic, and therefore, necessarily heads towards crazy collapses into chaos, which drive severe social storms to blow through, due to the all the pressures that were accumulating regarding the differences between the socially successful, enforcement of frauds, versus the relatively objective realities that those frauds were still false.
There are no good grounds to doubt that globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs, were able to magnify the previous systems of paper frauds, backed by gunpowder weapons, by SO MANY ORDERS OF MAGNITUDE that NOBODY fully understands that
"dangerous situation." In my view, it is ridiculously optimistic to expect that the international banksters' global agenda will eventually be successfully implemented, because those ruling classes have become far too psychotic psychopaths, whose excessive success, based on applications of the methods of organized crime through the political processes, have become runaway criminal insanities. Tragically, most of the other people who were ruled over, for generation after generation, by the established systems of backing up lies with violence, which became more sophisticated and integrated systems of legalized lies, backed by legalized violence, have become the matching bookends of those systems of runaway criminal insanities.
The ONLY connections between human laws and natural laws are the abilities to back up lies with violence. To the degree that civilization is dominated by professional hypocrites doing that, that civilization becomes MADDER & MADDER, as indicated by the degree to which there now exist MAD Money As Debt systems, backed by MAD Mutual Assured Destruction systems. Although human beings never actually violate the laws of nature, human beings are able to lie to themselves and each other about those laws of nature to astonishing degrees, such as how the entire political economy has become based on ENFORCING FRAUDS, whose fundamental falseness has been amplified to astronomical sizes!
The social successfulness of the established systems operating through the vicious spirals of POLITICAL FUNDING ENFORCING FRAUDS have enabled that civilization to adopt overall attitudes that deliberately ignore the conservation of energy, as well as deliberately misunderstand the concept of entropy in absurdly backward ways.
SINCE THE REAL FUNDAMENTALS ARE ENFORCING FRAUDS, WHICH BECOME MORE AND MORE FALSE, THE RELATIONSHIPS BETWEEN THE HUMAN WORLD AND THE NATURAL WORLD BECOMES MORE AND MORE PSYCHOTIC. However, at the same time it also proportionally becomes politically impossible to stop those vicious spirals from spinning through ... Although human beings can not change the laws of nature, they can deliberately ignore and misunderstand those laws of nature to astonishing degrees, especially when the social successfulness INSIDE their human world depends upon enforcing frauds, in ways which are willfully blind to the increasing falseness.
In my view, that is the correct overall context to read:
This bubble of BUBBLES is the development of Neolithic Civilization, based upon being able to back up lies with violence, being blown up and UP by progress in physical science, while political science has not progressed. Instead, the Grand Canyon Chasms have grown wider and WIDER, that civilization is controlled by electronic frauds, backed by the force of atomic bombs, simultaneously while the ruling classes and those they rule over have developed increasingly evil attitudes of deliberate ignorance and misunderstanding of the laws of nature manifesting through human beings and civilization.
The TRIUMPHS of sociopolitical systems whose core is organized crime, surrounded by controlled opposition groups, all based upon ENFORCING FRAUDS, have never actually violated the underlying laws of nature, but nevertheless have developed a culture dominated by professional hypocrites, whose degrees of willful blindness towards the worsening FALSENESS are now trapped inside deepening ruts of runaway criminal insanities, which apparently have no ways out, other than to wear the bottom of those rut out, and fall through to some series of Stock Market Collapses, and other kinds of crazy collapses into chaos, which are proportional to the degree to which civilization has become psychotically insane.
The "corrections" necessary are proportional to the degree to which human civilization's systems of artificial selection have become effectively decoupled from natural selection systems. Those "corrections" should be based upon admitting and addressing the degree to which the entire political economy has become based upon ENFORCING FRAUDS, however, the FALSENESS of that has become magnified by many orders of magnitude, to the degree that it is politically impossible to imagine those "corrections," within the established sociopolitical systems.
AROUND AND AROUND WE GO WITHIN the apparent social successfulness of pyramid systems based on enforcing frauds, which have resulted in a society which deliberately ignores the principle of the conservation of energy as much as possible, while also deliberately misunderstands the concept of entropy in absurdly backward ways. Therefore, the "corrections" to an economic system based upon governments enforcing frauds by private banks goes far beyond those which are typically presented as the superficial "solutions," or "corrections," presented in Zero Hedge articles and comments ... In the same ways that the existing globalized electronic frauds, backed by the threat of force from atomic bombs, were based upon series of profound paradigm shifts in physical science, so too, the "corrections" necessary within political science in general, and "economics" in particular, must be series of profound paradigm shifts.
However, at the present time, we are trapped within the vicious spirals of POLITICAL FUNDING ENFORCING FRAUDS, automatically getting worse, faster ... Natural selection pressures were internalized as human intelligence, and have driven that to develop artificial selection systems whose social successfulness became based upon the maximum possible deceits and frauds. Therefore, human laws continue to be based upon natural laws, however, the public presentation of "economics" deliberately ignores and misunderstands how that actually works to the greatest degrees humanly possible.
Frustrating, because the FED swallows for the market. But retail can't get any of that action.
the bottom line is, most accts and their managers don't pay any attention to this. To them the FRNs are money. They don't care about anything else. And they have a lot of them. From that vantage point, it is a game of winners and losers. Right now, the trade to create losers is blasting through the 2015 highs set in June. That break is likely to burn a lot of bears, and will suck un a lot of sidelined capital. It is likely to generate a lot of emotion and will likely have one of those gravity defying looks.
for some time the stock market has only offered you an inflation adjusted offset. you mean to say we had 8% inflation for all those years? well sure in terms of financial assets, government wages and benefits, most of those retirement benefits, and the quality of healthcare. so there's value in inflation in the quality of goods and services, and their availability. commodities are a constant however, and so they actually deflate relative to their byproducts. these things can't increase in value forever at that rate, its just that industry was behind in providing HC and paying its government workers, but how long can you justify expanding government with a phony war on terror? how much HC does a 90 year old person really need? so instead of saying lets improve housing they just keep pouring money into the old economic model and hoping it comes out okay. since they have to expand their degree of control it is less likely that the real economic opportunities will be addressed and more likely that they have to pour money into something they have already fixed. if its already fixed, don't fix it again. so boom we go crash and then the free market comes back in and money goes where it is needed. pretty soon now i think, and housing is really technologically in the stone age. thats the next big thing, cheaper and better housing.
If you sell you fall off a roof or get a date with a nailgun.
Pull the other one.
The funny thing about this is that by doing what they have done, the Fed and Wall Street have taken 100% responsibility for price. If there is no crash then they are 100% responsible. If there is a crash then they are 100% responsible.
Ya takes the power, ya take the responsibility that goes with it. At least people will know exactly who to blame. There will be no so called unforeseen black swan ... even if there is a terrorist attack or a kinetic weapon hitting the ocean, people will know who is responsible.
I do believe our government is capable of any atrocity or outrage and doing it with a pious and righteous face. I live abroad and frankly I feel nervous even visiting anymore.
I have been pulled over two times for minor traffic stuff in 50 years and each time was humiliating or life threatening, and I am your typical law abiding old white man with a white shirt and everything.
Moving my own money around is nightmare of frustration.
It seems that the people in the top spots in government do not relate to the people that they rule over. The US government does not represent the American people. They are apart and separate from the people. This begs the question: "why?".
Is it because they are actually different than the people they claim to represent or are they under an influence that they cannot resist?
There are many questions: Why the huge military? Why overthrow peaceful countries? Why kill/murder innocent people at all? Why the underground bases? Why the massive and comprehensive surveillance state? Why the vaccines and other harmful drugs and GMOs? Why the propagandist media? Why the lies?
It all points to those who are running things being absolutely terrified of something or someone. What or who? Are they afraid of te people? If so, that does not bode well for us because they have shown a willngness to just murder anyone they want.
You'll find well-reasoned, graphic answers to all those questions at:
https://www.youtube.com/watch?v=U1Qt6a-vaNM&feature=youtu.be
What they are afraid of is losing power and control... pretty obvious.
If the Fed's ammo comes from a printing press, what is limiting it?
nothing, the new IMF plan to issue SDR on top of the existing currencies will allow them to kick the biggest can down the longest road, ever. with automation and the jobless society people depend on government to issue their purchasing power, so the loss of confidence in the currency is irrelevant. government subsidizes the producers, who it turn distribute their goods and services without charging the consumer.
Hyperinflation. When the money pumped into the stock market leaks out into the real economy, they're done.
So why did the markets react positively to the FOMC meeting minutes strongly indicating a rate increase in December?
Don't read anything into price ... it is controlled.
He has a thousand copies to give away. Don't wreck his thesis!