That [the unchecked market intervention by the Fed] will never change, Bill. Here’s what will happen: 99.5% of the public will NEVER believe that gold is the solution and they don’t even care if it’s manipulated. But when the point in time occurs when it becomes obvious to most that they have to have gold to stay afloat, it will be too late. There will be LOOONG lines around the block at coin shops. People in the front of the line will be able to sell some of their gold and silver to people in the back of the line for DOUBLE the price they just paid. It will be similar to the Weimar Republic when someone would order a cup of coffee, drink it, order another one and the 2nd cup was twice as expensive as the first. That day may not be far off. – my email exchange with Bill “Midas” Murphy of Lemetropole Cafe
If it’s not obvious to anyone by now, then those “anyone’s” are not following the news. All private-sector sourced economic data is showing an economic collapse in progress. The exiting home sales data is not private – it’s quasi-Government because the statistical seasonal “adjustments” programs used by the National Association of Realtors is the same algorithm used by Government statistical magicians.
Just take a look at the list of headlines in Zerohedge this morning – this is not a product of “conspiracy theory” website – it’s the economic headlines listed in one place:
- Stunning Satellite Images Of The Global Tanker Glut
- Auto Sales Tumble In The Bellweather Month of May
- Construction Spending Collapses – Worst Since April 2009
- US Manufacturing Weakest Since 2009
- The Federal Reserve Has Created An Unprecedented Disaster For Pension Funds
- Goldman Fires Dozens Of Investment Bankers
Those headlines show the truth in one line-up. I can guarantee you that nearly every mainstream media source of business news will not list those reports today in one place and the reports themselves will be nothing but mangled propaganda and spin.
I suggested a couple months ago that auto sales would start tanking hard this summer. The statistical pool of humans who can fog a mirror and do a “sign and drive” for a car loan that exceeds the value of the car has been largely used up. Maybe if the driving laws are changed to enable anyone over the age of 12 to drive, the Fed/Govt can kick that can further down the road.
I want to focus on the last two bullet points because they are the most revealing about the degree of rot beneath the elitists’ schmear of mascara that’s being applied heavily to cover up the truth.
Wall Street banks are usually the last segment of the business world to fire staff. We’ve already witnessed many major GDP sectors unloading payroll: manufacturing, energy, retailing, auto OEMs, etc. A friend of mine drove to Utah this past weekend and saw miles of rail freight cars sitting idle on the tracks. Rail freight activity is like the “nerve center” of an economic life-system. It directly reflects the relative degree of activity at every level of the economic model from raw material transport to finished product distribution. If rail cars are sitting idle it means economic activity is sitting idle – supply creation and demand usage…at every level in the “food” chain.
The point here is that, if Wall Street is chopping heads, it means that not only has economic activity ground to halt, but the crystal ball perma-bull forecasters deep inside the banks do not see any hope of renewed business activity in near to intermediate future. Banks like Goldman will do anything to stir up financing activity. If financing activity can’t be jolted from the corpse, then it’s time to bury the corpse and get rid of the grave-diggers.
What’s astonishing is that after that line-up of news hit the tape, the S&P 500 initially dropped down over 9 points but since then has “rallied” back to nearly flat on the day. How is this at all possible unless the Fed is in there preventing the inevitable? The intervention has become absurdly obvious. I’ve concluded that one of the primary drivers of the need to keep the stock market from collapsing is the pension problem.
A friend of mine did an exhaustive, in-depth study of public pension funds. He concluded that if there’s a 10% decline in the stock market for any sustained period of time, every pension fund will collapse. The Central States pension fund manages the Teamsters pension in several States. The S&P 500 is near an all-time high and every other primary asset has been inflated by the Fed to historical levels and this pension is still collapsing. That’s just a “sniff” at how bad the problem really is. The State of Illinois public pension fund is one of the largest in the country and it’s on the verge of collapse.
I was chatting with him about the cash inflows and outflows at his particular fund, which theoretically is not “underfunded” (but it really is). I was stunned to learn that outflows exceed inflows every month and they have to sell assets every month to fund beneficiary payments. This is because, in order for the fund to achieve cash flow “neutrality,” it needs to generate an 8% ROR. Even though we’ve had 7 years of Fed-driven stock and bond price appreciation, all of these pension funds are still underfunded. Last year the returns were flat to down. Every year that returns are flat to down, every fund with an assumed 8% (some are set at 7.5%) hurdle-rate for cash flow neutrality goes in the hole by 8%.
This is why the Fed has to do whatever it takes to prevent the stock market from tanking. Yesterday was a prime example. The S&P 500 was down about 11 points with 45 mins left in the trading day. By the close it was down only 2 points. The Fed pushed it up in a 45 degree angle to positive territory but a flood of sell orders hit the tape with about a minute left. The Fed couldn’t keep the index green but it was a “victory” nonetheless. The market took back the other nine points going into today’s open, but the Fed has managed to push it back to largely unchanged from yesterday’s close.
I don’t know how much longer the electronic trading systems will tolerate this degree of intervention. We do know that the Fed “unplugs” some of the electronic trading platforms when sell orders flood down those HFT “pipes.” Notice how the market never “breaks” when the buy orders flood those very same “pipes.” Funny thing, that.
The U.S. financial and economic system is a Ponzi scheme of unprecedented size. The media will have you believe that China is the problem. But it’s not. The real problem is the powder keg of fraud and corruption that underlies the United States. The lit fuses protrude from every nook and cranny of the system. It’s impossible to know which fuse will hit the powder and when. But there’s no doubt that it will come from a source that no one anticipates – not even “them.”
It just goes on and on…Guess it will until it blows up. Bill Murphy
On point as usual Dave, great summation. “They” haven’t yet been able to close the S&P above the April high of 2102. Itching to short but today is a prime example of why I haven’t pulled the trigger. Jesse thinks there will be a good slide sometime this month.
Someone on here mentioned Benjamin Fulford a week ago. I have no idea if he is for real or a complete hoax. If you think what he has been saying about a global reset, and Chinese gold loaned to the U.S govt Is true then you might like to listen to this. It lays out how we got into this mess with the setting up of the federal reserve. It’s an hour and half long. If you want to skip the first 45 minutes the last half of it lays out what has happened over the last ten years. https://m.youtube.com/watch?v=iWylHQikojA
According to this in the last few months General Dunford has replaced Obama as acting President. Who is now just a show pony . A reset is being organised. The fed is being shut down and the fiat currency is being suspended. It appears The global Banking cartels are being forced to surrender. God knows if any of this is true?
Dave if this is all bullshit I’m sorry to put it on here. But some strange stuff seems to be going on in the background. If it is all bullshit it still makes for an amusing listen. We can only hope!
I listened to the last third, how neat and tidy, and of course the public is told squat, only insiders know the details, of course… no way
What “market”? A few large stock-owning insurers, funds and banks sell or buy purely and solely on technical indicators, chasing stuff going up and selling anything not going up. And a few machines doing the same thing. There’s no market breadth, little volume, no need to ever sell to raise cash…
Nothing moving. Petrified, fossilized…
2099.96…2099.98…2099.94…2100.00…2099.99…like watching paint dry.
glaringly Kreditanstal….no bankruptcy…not 1…..not a single insolvent entity anywhere in the system….the permanent high……
red, the last, the VERY L-A-S-T, thing the establishment want to see is truth. They will do ANYTHING to avoid having some entity, bank, fund, company or government go overtly and undeniably BANKRUPT. (NOT be able to pay out the expected income stream).
They will never, ever stop the lying, manipulating of GAAP, faking, bailing out and propping up to prevent this.
But when the dam finally breaks and too many expect simultaneous bailouts – and confidence is lost – we’ll see that nearly everyone has been swimming naked in a sea of fake wealth.
I know every one of you is thinking this, about this market, so i’m just gonna say it …. just like Pamela Andersons tits’ refusing to accept gravity & just as fake………
I know every one of you is thinking this, about this market, so i’m just gonna say it …. just like Pamela Andersons tits’ refusing to accept gravity & just as fake………email@example.com
“It just goes on and on…Guess it will until it blows up.” Bill Murphy
In the business of dealing with people and their problems for over 30 years I came to this conclusion about the elitists, psychopaths, narcissists, megalomaniacs, and charlatans running the financial system [and the sovereign governments and politicians they own].
Those of you reading this column whose primary interest is precious metals….don’t expect them to go up in dollar value EVER…until right before or right as the system collapses.
If I was forced to make a wager I’m guessing the Fed won’t raise in June in case there’s a Brexit soon after, and if there is and the market starts to tank then they have an out for not raising in July