Tag Archives: Ben Bernanke

Deep State Stock Market Logic

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Download PDF Version Originally Published 3/13/2019

Even a modest bear market will go a long way towards destroying the deep state. Deep State operatives are buying outright to control the trend of the market.  What is their alternative?

The choice is to invest more outright or have ones wealth completely devastated by natural market forces. The Deep State has absolutely nothing to loose by using their own resources to support the value they already have. The only alternative is to absorb a guaranteed loss and run the risk of ceasing to exist. Continue reading →

Bankers in Jail?

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indddexSuppose an engineer designed an air plane and had it built. Then he says it is such a good design anyone who flies in it has at least a 50% chance of surviving the flight. Then people from all over the world wait in line for a chance to take a ride. Is that going to happen? No,

When Ben Bernanke talks, people listen. He has never been right yet. Going back to 2006, he has not made one accurate forecast. The answers he gave when being vetted for his job by the senate now sound comical. Quantitative easing was never tested before it was tried but it did exactly what those of us who know what we are talking about said it would do. It elevated stock prices and impoverished the rest of the country.

Still Ben Bernanke is highly thought of and everything he says is taken with high regard. How is this possible? Would baseball fans get excited about a pitcher who had never thrown a strike? I guess not.

Chairman of the Federal Reserve is a person Americans worship. It wouldn’t matter who had the job. Americans don’t look at facts when they worship a person. So, after damaging the country possibly more than anyone in history, he starts making comments and writing books based on his presumed knowledge and experiences as Federal Reserve Chairman.  The American public is incredibly stupid. Very few have any knowledge of history. They have no reasoning skills. They struggle with the simplest math problems. Their self esteem is in the stratosphere. When they worship someone, everything that person says or writes is taken as the gospel. Ben Bernanke is not a good economist. Take the time to look at the facts.

Lately he has been saying that during the financial crisis of 2008 certain bankers should have gone to jail. Guess what? He is right about something possibly for the first time. But, he should go to jail with them.

Hedging Against Looking Stupid

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122854053_bernanke_388803cAmidst of world wide central bank efforts to keep stock prices elevated and moving higher, public figures especially current and past Federal Reserve Chairs are starting to comment that stocks are over priced. Remember these people all have genius plus IQs. The world is full of bright people doing stupid things. Why do smart people do stupid things? For one stupidity and intelligence are completely independent of one another. Stupidity is simply maladaptive behavior.

If a brilliant person wants something to be true bad enough, he will see it as true the same as will a moron. Chances are though Federal Reserve members are doing stupid things in keeping with the political agendas they are carrying out. Nothing is too stupid to do if personal gain is great enough. At higher levels economists get paid to lie so stupidity may not enter the picture. The price is right and accepting money is rational.

Still, the wealth effect that has been created never has had a prayer of benefiting the entire country. Do both Ben Bernanke and Janet Yellen really believe QE is a good deal? There is not a chance they do but you will never get an honest answer.

Just watch what happens. More and more statements will be of the kind that point to stocks “possibly being overpriced.” Look for others besides the Fed people to start throwing in their words of caution. Doing stupid things for profit is a whole lot different than doing stupid things because one is an idiot.

Expect more of these kinds of statements. They are hedges against looking stupid. Stupid for personal gain makes sense in a professional sense but no one wants to wear the label.

As for politicians, as the economy denigrates and the financial markets collapse, they will practice the art of not knowing. All will be innocent as in deprived of meaningful information.

Make no mistake. The Federal Reserve folks knew what they were doing.00_logo_1

Rigged Market Economy

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bush_fascismThe transition has been made in the U.S. from a free market economy to a rigged market economy.

The following is a decent definition of a free market economy.
“DEFINITION of ‘Free Market’
A market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sellers are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.” http://www.investopedia.com/terms/f/freemarket.asp
In the beginning, the U.S. economy was largely free in nature. In a new land with little structure, a free market system developed naturally. The free market concept worked so well, the founding fathers saw fit to separate from England rather than accept government interference. From day one in the new country anyone who could used government as a means of living off the efforts of others. But, the opportunities to do so were minimal. As the country grew and became more complex this changed. Corporations became very powerful and increasingly pressured congress to rig markets. From the 1980s on government policy killed off the free market system.
Adam Smith, father of free market thought, addressed the problem in his classic, Wealth Of Nations.
“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”
? Adam Smith
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
? Adam Smith, The Wealth of Nations
Today, for the most part, government decides what citizens purchase and what they pay. Health care is a good example. It is the largest segment of the economy. Government policy dictates that patients pay an insurance company first. The physician is paid by the insurance company. The insurance company plays a role in determining treatment and what medicine is prescribed.
For the most part citizens are happy with the lower living standards of a rigged market system because they are relieved of the stress of making decisions. They are happy to pay more in return for the illusion of being taken care of. They have no choice so they might as well be happy. Government frequently decides what they buy and they don’t mind.
History’s most famous rigged market system was Germany under Hitler just prior to World War II. One of the seldom mentioned attributes of a free market is peace. As a country moves away from free markets, the chances of war accelerate greatly.
Karl Marx is often noted as history’s most destructive economist. In years to come he will probably be supplanted by the names of Ben Bernanke, Henry Paulsen and Janet Yellen. These are the economists who with the authority given them put the last nails in the coffin of the American free market system.

Bull Market Over

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During the 1980s, while Ronald Reagan was president, government began tampering with the financial markets. In the spring of 2003 government started working aggressively with Wall Street to elevate asset prices. In spring of 2006, when asset prices were showing signs of weakness, Henry Paulson was named Treasury Secretary for the purpose building a larger and more active consortium to keep housing and stocks on an upward path. When this effort failed, TARP was passed partly as a face saving effort and partly to save the remaining assets of the politically privileged upper class.
Quantitative easing first under Ben Bernanke and now Janet Yellen provided unlimited funds for stock purchases. Laws prohibiting manipulation were not enforced. Friends of the Federal Reserve have traded risk free for three years. The U.S. Government has been reduced to an income redistribution engine. All laws that come before congress are for the purpose of rigging one market or another.
The poor and middle class have been robbed blind. Most are still clueless as to how the process has worked.
One by one the pillars of our free market system have been discarded. Central economic planning has allocated the nation’s resources so inefficiently that genuine growth is no longer possible. Government at all levels requires a high rate of growth in order to produce enough tax revenue to continue operating.
The bull market that began in 2009 has been politically engineered without much regard for the consequences. A hand full of billionaires has benefited and will never have any regrets. For all others, their financial futures have been destroyed. Most who haven’t already are going to lose everything they have.
But, it does look as if all efforts by all of the governments in the world are no longer enough to keep the market from falling. I do believe the bull market is now over.

On Top Of The Stock Market Crash

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With the stock market collapsing more today, this is a great day for me with respect to my investments. As I have written previously, I have been aggressively taking out short positions for over a year in anticipating a severe economic depression. I am absolutely sure all financial assets are going to plummet. While my investing approach may seem extreme, I feel completely safe with it. I am already ahead almost 50% for the year.
So, where do I get my confidence? I know for a fact that human beings do not just behave like herd animals. Human beings actually are herd animals. From birth we are all trained to be members of herds and sub herds. All through school, children are encouraged to establish all sorts of arbitrary loyalties. By the time kids are grown, individual thought is all but extinguished. None of this is done consciously. It is all instinctive behavior. Humans both deny acting on instinct and are unaware they are doing so. Only a handful of others and I have enough awareness to see that society is governed by herd dynamics and not individuals reasoning individually. Am I happy knowing that I am a herd animal? No, but I am not going to let that stand in the way of my making a profit.
Other analysts believe policy decisions are made using reason and intellect. I correctly study human behavior in terms if herd dynamics. For example, I know when the Federal Reserve makes a decision; it is always based on compulsions that are dictated by herd instinct.
Lonestar Card Lonestar Card is a song I wrote and recorded as Curbside Jimmy a number of years back with the Curbside Jug Band. If you listen very carefully to the bass, you will discover that it is a Jug. The jug was played by the late Gator Ron Ramey, who was the probably best jug player who ever lived. The the jug is prominent at the very end of the song. Lonestar Card celebrates the welfare system in Texas of which so many Texans are very proud.