week, volatility made a long-overdue return to the US and global
began with a 2-day back-to-back violent drop. Day 3 saw a big
rebound, swiftly followed by two more days of gut-wrentching
losses. And then finally, last Friday, the day saw massive
swings both high and low, ending with a huge upside run.
this period the S&P 500 lost more than 300 points.
Since then, though, the market has been steadily rising.
the danger past? Are the markets safe once
if so, did the markets recover organically? Or were they rescued
by The Plunge Protection Team (PPT)?
such intervention was rare we could almost justify it, if it
took the form of simple, pre-arranged circuit breakers that shut
the market down for a "cooling off" after they’ve moved too far,
too fast. Indeed, these already exist, and are sufficient in our
if such market interventions are routine, persistent, and
generally depended on by the major market participants, then
they're highly destructive over the long term.
we live with the latter.
get stinking rich by front-running the scheme (check). Normal
adjustments are prevented (check), allowing dangerous bubbles of
extreme overvaluation to form (check), while fostering
this long enough and you end up with a deformed economy, an
eroded social structure, and markets that no longer function as
appropriate mechanisms for capital distribution and economic
is where we find ourselves today.
Soviet Crop Reports
the former Soviet Union, the communist method of assuring
economic progress was to set targets for production. Famous
among them were the crop reports.
these, year after year, the various regional oblast (province)
authorities would declare having met or exceeded the crop
targets, despite rarely ever truly doing so.
crop reports were so famously unreliable that the Kremlin
leadership eventually took
to obtaining their information from US satellite
reconnaissance data rather than their
own internal reporting from local Communist Party bosses.
next year’s crop planting decisions on these reports often led
to famines, and sometimes even mass starvation of entire
data = Bad decisions.
Soviet crop reports are now a famous example of an unreliable
measure that led to disastrous consequences. Because of the
false reporting, poor decisions were made. Eventually it became
clear to even the Soviets that attempting to centrally
micro-manage a major economy is an act of
much of this and
too little of that were
produced. Cement, steel, and auto quotas harmed rather
than helped for obvious reasons; poor information flows assured
that production decisions were late or flawed or both. All this
contributed dearly to the Soviet economy's collapse.
lessons here are instructive and simple:
management of complex systems doesn’t work, and
data leads to bad outcomes
stock and bond markets are no different than the Soviet crop
reports of old. They mainly represent what a small
committee of central planners believe are the right numbers to
achieve very broad macro-economic goals.
damage has already been done by the interventions and
distortions resulting from the pursuit of the delusional aims of
todays central planners (with the world's central banking cartel
being the most culpable).
it's poised to get a lot worse from here.
ironic parody of all the current US concern over the possibility of
Russian meddling in US elections is that virtually nobody from
either political party seems the slightest bit concerned that
the US is actually recreating the very worst mistakes of the
now-defunct Soviet empire.
point of fact, the Federal Reserve has done far more
self-inflicted harm to long-term US interests than anything that
Russia has been accused of, let alone been proven to have done.
At this point, there’s no contest between the two.
the damage inflicted by the Federal Reserve had been done by a
terrorist organization, it would for certain be public enemy #1.
that, under the Greenspan/Bernanke/Yellen Federal Reserve, the
following has occurred:
plans, both public and private have been ruined.
Millions of future retirees and taxpayers will not have
trillions of dollars they would and should otherwise have to
support them in their later years.
inequality is at the highest its been in over 100 years
inequality is also at historical extremes
debt is now nearly $1.5 trillion, up ~ $1 trillion since 2007
than a trillion dollars of interest payments on savings
accounts has been forfeited -- denying funds to the
next generation for use in business creation, household
formation, and education.
debt in the US and globally is up massively since the 2008
Great Recession (itself a central banking accident), and now
stands at more than $233 trillion worldwide.
are among a few of the destructive results of the Federal
Reserve’s decision to lower interest rates to 0% in order to
reward the big banks, well connected private equity firms, and
unrestrained government borrowing.
course, when you print money (as the Fed does) you cannot create
wealth; you only transfer it from one party to another.
another way, the Federal Reserve and its foreign partners
(the BoJ, ECB, etc.) have been picking winners and losers.
have been seniors dependent on a fixed income, Millennials and
every generation following them, and savers, pensioners, and
taxpayers. The winners have been the banks, the ultra-rich,
entrenched political parties, rentiers, and baby boomers with
sizable financial portfolios.
just one example of the kind of devastation the Fed's deeply
unfair actions have wrought. A simple Google search on "pension"
brings up the following spate of alarming headlines:
catastrophic losses that will result from these massive pension
shortfalls is nothing less than an act of domestic terrorism by
the Federal Reserve. They will haunt the US for generations.
should be serious consequences for destroying the futures of
tens of millions of retirees, on purpose --and knowingly
-- simply so big banks could not just enjoy fat
profits, but record fat
profits, for nearly ten years in a row:
more bluntly: approximately 90% of US citizens have been
financially and economically tossed under the bus simply so that
the already-rich could get a little richer. If that’s not a form
of terrorism, I don’t know what is.
chart shows the future burden amassed under the last three
Federal Reserve Chairmanships:
of that could have happened under responsible banking practices.
Instead, such excess was enabled and encouraged by an activist
Federal Reserve that loosened and loosened some more whenever
reality began to exert itself.
did this to reward themselves and their colleagues and banking
associates. It has been a series of self-dealings and
unchecked conflicts of interest.
point here? None of this was done by accident. It has been
deliberate and done with full intent to create exactly the
conditions in which we find ourselves.
we could go ahead and obsess over the claim that somehow an
insignificant $100k worth of Facebook ads purchased by
Russia are somehow responsible for our current misery and
overall state of domestic neglect. But we'd be focusing on
entirely the wrong parties.
worst threats we face are right here at home.
bad as the damage done so far has been, the real pain has not
entire command-and-control system of the US and other western
economies and markets has resulted in several decades of
increasingly poor decision making and mal-investment.
it comes to repaying the current global debt levels of ~310 % of
GDP, we can confidently predict that such a debt load can never
be repaid. They can only try to roll it over as long as they can
-- which can't go on much longer without real consequence.
Mounting losses are certain at this point.
it comes to underfunded promises and entitlement programs,
such as pensions and social security (clocking in at nearly
800% of GDP!), there’s really only one all-important question
that matter at this point: Who’s
going to eat the losses?
2: It's Even Worse Than You Think, we reveal the much
further extent of the racket being run against the public by
the world central banking cartel, and how it's efforts to
continue this racket have sentenced us all to another massive
financial/economic crisis -- one that is both now inevitable,
necessary, and overdue.
preventing that which should happen, the central banks have
set the stage for an enormously dangerous and disruptive
market crash. The kind that forces markets to close for
days and weeks on end. The kind that leads to major
banking crises punctuated by 'holidays’ where depositors can
not access their money. The kind where disorder and
social unrest becomes a real risk.