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4.27.2016 -Financial Intelligence Report Bookmark


Can You Beat City Hall?

While there’s a million things I’d like to write about, I keep trying to hammer one point over and over, because it is indeed “that important”.  What is that point? If you truly see what they’ve been doing, you’d have to admit to yourself that we’ve entered the twilight zone matrix-like market.

Because I pump out 2 letters a week for over 20 years, it becomes hard to follow the plot sometimes. Hey, I get it. We talk about a lot of things in these letters. But there are “big themes” that don’t change week to week and it is the big theme that I’m talking about right now.
In years gone by, there has ALWAYS been some sleight of hand, some fraud, some manipulations, but for the most part they were fairly minor. As the 80’s gave way to the 90’s we started seeing more and more “interesting” things being done by the folks at the top of the economic pyramid. By the 2000’s, things were getting outright silly. Central banks had gone from some mysterious group in the background, to the cover of Time Magazine. Greenspan was labeled the “Maestro”, and Bernake was credited for saving the world.

Better fiction Shakespeare could not write. Bernanke didn’t save the world, he saved his criminal bankers who had single handedly RUINED the world. Greenspan wasn’t a Maestro, he was a globalist puppet that blew so much money into the system, we nicknamed him “Bubbles”.

In the past several years, major institutional banks have been fined the upwards of 200 BILLION dollars for rigging markets. Defrauding mortgage holders Fixing the Libor rate. Fixing the gold price. Fixing the silver price. Laundering money, you name it. So let’s first establish that when I call the bankers criminal, I’m not just name dropping they have been CONVICTED of being criminals. Let the label fit.

Now these criminal elites have done some tremendous job of blowing up the US. In 1913, just ONE Great grandmother’s lifetime ago, a buck was worth a buck. But our Central bank genius’s got involved and a dollar in 2016 is worth 6 cents compared to 2013. Just 40 years ago we were the creditor the entire world, and our manufacturing was the strongest on the planet. Today we’re the biggest debtor nation, and we’ve shipped all those millions of fine, high paying jobs, to Mexico, China, Vietnam, Bangladesh, Hong Kong, South Korea, etc.  

They’ve raped and pillaged everything that ever was good about the US. Our sound money? Gone, it’s backed by nothing but debt. Our manufacturing? Gone. Our biggest employer? Wal-Mart. Our economy? Shambles. Our middle class? Destroyed. Our wages? Stagnant.

Here’s where we get to the meat of the problem. The DOW and S&P are flirting with ALL time highs. Think about that in this context… think back to when you were younger and you simply KNEW that the US was the top dog. Jobs were plentiful, pay was outstanding, our social morals were high, our debts low.  Yet…the stock market in what ever year you just selected, was many many thousands of points lower than they are now.

Today, our GDP has been slashed to 0.4%. Earnings for the first quarter are imploding, and revenues? 80% of them are lower YOY. Today 97 million aren’t in the workforce, 48 million on food stamps. Bloomberg just reported that 1 out of every 5 families in the US has NO ONE WORKING.  Global shipping is in the toilet. Our debts, which sucked in 2008 are now trillions HIGHER than in the melt down. Yet stocks? 1% from all time highs.

Do you really believe that could happen in a normally functioning world? Do you really think NEGATIVE interest rates could ever even be considered in a normally functioning world? They’ve never been seen in 6,000 years of recorded history. Well we “got em now”.  Shall I go on? Nah, you’ve heard me scream about all this and more many times.

Which brings up my repetitive ranting that the ONLY thing keeping this market at nosebleed levels are the Fed and our banks, playing big time games. Whether it is keeping rates at 0, so corporations can gorge themselves on debt and then buy back their own stock, or doing round after round of QE, which they NOW admit was ONLY done to boost the market. (Rich Fisher of the Dallas Fed said exactly that on CNBC live)

Yet no matter how many times I say that the Central banks are colluding to keep equities up, so that the entire world doesn’t simultaneously crash, I still get tens of dozens of emails telling me I’m missing the boat on all this. “They couldn’t possibly be supporting the markets as I suggest” – is a common rebuttal I get often. Well listen up sunshine…if we’ve proven the Central bank has ruined our currency, and we’ve proved that dozens of banks from Goldman to Well’s Fargo, to Deutche bank, etc have been fined hundreds of billions for RIGGING markets, how in God’s name can you not understand that they’re rigging this stock market as we speak?

Before we get into the numbers, there’s something I want you ALL to think about VERY Carefully. Back in 2008 when we were in melt down mode because of the malarkey the banksters had pulled concerning mortgages and debt, there was something that snuck in that was way under everyone’s radar.  

Do you know how many times the Fed has been audited since 1913? That answer would be ZERO folks. But after the melt down of 2008, Congress was allowed to look into just ONE area of their operations and guess what they found? They found that the Fed’s had sent  16 TRILLION dollars to Europe for banking relief.   Here’s a quote out of Forbes so you don’t think I’m making this up…

The audit of the Fed’s emergency lending programs was scarcely reported by mainstream media – albeit the results are undoubtedly newsworthy.  It is the first audit of the Fed in United States history since its beginnings in 1913.  The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis.

 

So these fine gents at the Fed, who’s only been partly audited ONCE was seen to be sending 16 trillion to foreign banks. The first miniature audit in 100 years, and they were already caught doing something.  If they were doing that…what Else have they been doing that we’ll never know about? If there’s NO audits, how can you tell me they aren’t printing up more money than they report and buying up stocks to keep things liquid?? You can’t.  (they are)

Other nations have come forward to actually tell you to your face that they’re supporting stocks. The Swiss National bank holds 97 billion worth of stocks. Do you suppose they might have a reason to try and keep prices up??  Which brings me to Japan.

Two weeks ago I told you of a Bloomberg report stating that at the end of April they expect Japan to up their stock, ETF and bond buying to 7 trillion yen, from the current 3 trillion. If the BOJ accelerates its ETF purchases this week to an annual rate of 7Tn Yen (the pace predicted by GS) the Central Bank could become the #1 shareholder in about 40 of the Nikkei’s companies by the end of 2017, according to Bloomberg calculations. It could hold the top ranking in about 90 firms using HSBC Holdings Plc’s estimate of 13Tn Yen.

Now let me ask you all a simple question. When the BOJ buys these stocks, and will become the number 1 shareholder in 40 of their top stocks, do you think they care about price discovery when they buy? Hell no, they push a button and “poof” they own another 25K shares of each. Over and over and over. So just what then is the REAL price of the stocks?  If a Central bank, with printed money simply buys “X” amount every month, driving prices higher, are they now trading where they should be, or are they at some perverted multiple that is completely foreign to reality??  You know the answer.

Well the same crap is going on with OUR Feds, but because they don’t publish such things and they can’t be audited, we don’t get to see it. But let’s just say that if Japan is doing it in the open and the Swiss are doing it in the open, you KNOW Draghi and the ECB is doing it, and Cookie lady Yellen is doing it.

Now, go ahead and tell me that stocks aren’t propped up. Japan is TELLING you they are. The Swiss are TELLING you they are. Central banks should NOT BE BUYING STOCKS!!!!  So if you really believe that our idiot Central Bankers aren’t buying every dip in this market, you need better med’s. Really.

The bottom line to this rant is this…people ask me all the time why I’m only doing mostly short term trades and not any real buy and holds outside the precious metals arena. The answer is simple…the only reason stocks haven’t fallen by 5K points or more is that the CB’s are propping it up. Is that a valid reason to buy and hold stocks? What if their strategy changes at some point and they determine that it is time to pull the plug? Or mainly, since this has never been seen before, do we have any proof that it will work?

We’re in a situation that’s never been seen before, from Negative Interest rates to CB’s holding the lions share of public companies. Call me crazy, because I probably am, but somehow this stinks like 5 day fish.  Be careful out there.

The Market…

And the show goes on. Today was FOMC decision day. Well that was sort of a no brainer, because as I explained above, JOB ONE is to keep the markets up at any cost. Who cares if savers are crushed by low rates? Who cares that they say we’re doing wonderfully while report after report says we’re sinking?  

Yes I’m whining. And I need to tell you why.

If you look at the history of the market you see something remarkable. Every 7-8 years or so, they pull the plug. The market gains and gains for about 7 – 8 years and then “POW” it crashes.  For instance we ran like mad from late 1994 right to 2000. Then the Wheels blew off. 200 companies that were over 100 a share were under a buck by 2002. Fortunes lost.

Then the market got done falling and started to climb. Year after year it climbed the “wall of worry” and then in 2008?  “WHAM” down it went, crushing people along the way.  Then they got all their ducks together and started the game all over again. Since late 2009 it’s been up up and away.

Well, we’re in year 7 of this run. They have thrown the kitchen sink and the toilet at this market to keep it going. QE programs, bail outs, stimulus projects, 0% interest rates, you name it. Any and everything to keep the plates spinning.  Yet what do the numbers show us? The numbers show an economy swirling the bowl. The GDP hovering just north of 0%.  At some point, the market prices will be so completely disconnected from any reality of fundamental underlying economic activity, that it will collapse on itself.

That’s why I’m whining. I don’t know if it’s tomorrow, next month, next year or when, but just like the last decades of the 7-8 year cycle, a bunch of people who don’t remember the horrors of those former crashes are going to get their butts kicked again. Many of them at the worst time of their lives as they approach the magic retirement age.

Central bankers aren’t stupid, they’re just evil. They are smart enough to know that when Central banks are buying up stocks, or keeping rates artificially low so that companies can buy up stocks, that it cannot go on for ever. So if they know that, then they must know how it is going to end. Either they’re okay with the ultimate implosion, or they’ve got something else up their sleeve.  

Because the market appears to be Teflon and nothing bad sticks to it, people are getting the idea that it is normal for the market to just go up to new highs all the time. They don’t understand that it is only where it is at because of “never seen before” tricks like the Bank of Japan is pulling, or Negative interest rates, or “non GAAP, Proforma” accounting where they are literally spinning losses into quarterly gains. I suspect they’re going to lean about them the hard way.

I caught hell in late 1999 for being pessimistic. I caught more hell in 2007 when I called Cramer a show clown and that we were probably just a few months from a crash. No one wants to believe it is possible. Well I’m not going to win any friends this time either. We are in very thin air, with NO fundamentals to back us up.  So, go with the flow as you can, but just know that this is the biggest bubble ever seen, floating around in a shop full of knives.

Let’s chat on Sunday and see what they’ve managed to do with things.

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