Financial Markets Reminder

Below are some points to remember. At no other time in history has there been wealth concentrated in so few hands. Never before has there been the sophistication and tools for effectively managing stock prices for the personal gain of a small segment of society. Never before has government kept markets for goods and services from clearing. In a free market based system out with the old and in with the new is normal and necessary. Government stimulus prevents that process from taking place. Stimulus prolongs the lives of antiquated businesses for which there is waning demand for their goods and services. Stimulus is a political tool which is very successful at protecting the wealth and incomes of a small portion of society. In doing this, resources become more and more mis-allocated until an economy cannot grow any more. The United States is at that point now.

The market will crash. The sooner it crashes the greater is the possibility the country will survive. Make no mistake there is a consortium which manages stock prices for their member’s benefits. Do I know their names? No, that kind of relative information is not known in the present moment. It is not knowable. The fact is, a market could not rise in such an orderly way if it wasn’t managed. For government to enhance asset values, it is not necessary that the government announce an official program specifically for that purpose. Much more is done by government in a completely unofficial way than by using the halls of congress. The stock market is rising currently because central banks are buying. There is no other reason.

There is much talk these days about a huge impending correction coming soon. Probably a record number of articles have been written to that effect over the past six weeks. Some of these articles are on the level. Others are written for the specific purpose of drawing in short sellers prior to the the early fall which historically is the weakest time of the year.

Chances are, there will be selling pressure. For the market to crash, however,supply will have to be way more than the central banks anticipate. Any outright crash will have to be sudden and before the central banks and their anointed friends have a counter plan. For the good of the country, we should all hope that kind of crash takes place. If the selling is at all orderly, central banks will simply buy up supply. They may even opt to try and manage a controlled correction. Certain central banks already have enormous equity holdings. Do they want to take losses on those holdings? No, so they will keep pumping money into those holdings to keep the prices rising.

There is an additional possibility. The general public could wake up and realize they are being fleeced. A realignment of political power could have a huge impact. Chances are better that the bull market will end when there is hard evidence the economy has been destroyed.

 

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About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.