Of Markets and Men 2

By R.L. Avery
A lot has happened in the last two weeks. I struggle to pare it down. A trader that has been in the business twenty-five years told me he’s never seen a day like Tuesday of last week. That’s saying something. Where are we at now? Not today or last week or even where we’ll be two months from now. Where are we in the big picture? Well we are in uncharted waters. Never before have governments around the world run deficits like we are seeing and they just keep printing money. (The death of Money, Currency Wars, by James Richards)
The same people who were running things on Wall Street six years ago are running them again. Some of these people were hauled before congress but none faced prosecution.
(Greg Smith, Why I left Goldman Sachs) Most were given millions of dollars in salary’s plus bonus’s then new titles at other investment banks. As if that wasn’t enough they have been given cheap money and more or less told to go at it again; inflate everything that you can inflate. It’s worked.
The stock market has been going straight up for three years yet if the stats are right you haven’t noticed. Why? The common stock investor has not participated in this rally. You, the investor from main-street are in bonds. That doesn’t mean you should be impervious to the shenanigans of Wall Street and government.
What do you think happens when you reward people for failing? For driving institutions that are too big to fail into bankruptcy? What happened to all of the reforms? Three quarters of them expired before being acted upon is what happened.
Einstein said, “Insanity is doing the same thing over and over again and expecting different results” Yet that’s what we seem to be doing with the banking system.
So what caused a ten percent drop in the Index’s? I could tell you it was slowing growth around the globe.
Maybe it was the recouring insolvency of Portugal, Italy and Greece or China slowing or how about Ebola? The fact of the matter is this. It is not the last snowflake that cause’s the avalanche to fall. Which one, where? It is the foundation that the snowpack is built on.
The markets have been built on cheap money given to morally bankrupt institutions at best and criminals at worst. Now the Fed has been taking it away. But wait! We staged a rally late last week because James Bullard (a non-voting member of the Federal Reserve Board) suggested maybe stopping the money supply wasn’t really in the cards. He jawboned a rally!
The Government is too cozy with Wall Street bankers and I suggest you take notice. I leave you with this Quote by Thomas Jefferson. (The full quote you will have to goggle) “ I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever let private banks control the issue of their currency…
The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”

2 comments

  1. On point, Mr. Avery!

    We will all suffer in the meltdown, but some more than others.

    – A long term expat in San Miguel de Allende

  2. Reading this article in a Mexican newspaper … and no reference to the United States, it took me some reading to realize the article was not about Mexico, but the U.S. The apparent reason for the upswing in the stock market, is the $7 trillion that Obama has borrowed to dump into the economy to make everyone feel good and think that the economy is growing. Actually it has grown some 0.0 percent since Obama, while China’s economy has grown between 6 and 12 percent each year. Since the wealthy people and businesses are moving out of the country, who will be paying off the some $22 trillion borrowed debt?

    Between Obama and Hillary Clinton … who do not believe that private businesses create jobs, but just the government, the countrie’s slide down the hill is getting steeper.
    When the bubbles burst, the words of America’s Founding Fathers will come to pass. For government of our Constitutional Republic not to spend more that it takes in each year. Due to underfunding of employees retirement liabilities, towns, cities, counties, states and the federal agency are all insolvent to the tune of over $200 trillion , more than the total in the treasuries of all the world’s governments. Governments are obtaining their cash flow by taking money out of private banking accounts by the IRS, and the police are stopping drivers, and taking the money they have in their purses and billfolds.

    Investment advisors are recommending that U.S. citizens convert their money into gold and store it in their homes. The age of the U.S. oil dollar is about over as China, India and Russia have abandoned the U.S. dollar for purchasing oil.

    It’s not over until it is over.

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