Party Like It’s 1999: The Stock Market Is A Propaganda Tool
SilverDoctors.com
December 13, 2016
This will not end well…
From PM Fund Manager Dave Kranzler:
The degree and level of propaganda now flowing from the Establishment and the Establishment-controlled mainstream media is on par with that of the old Soviet Politburo or German Third Reich. In fact, I’d confidently propose that this point is incontestable.
With modern technology and regulations which have made Fed operations and accountability tragically opaque, I have zero doubt that the Fed and the Government have managed to turn the stock market into another propaganda tool. Studies have shown that, over the short term, the direction of the stock market and consumer sentiment measures are highly correlated.
Thus, pushing the stock market a lot higher is a mechanism that can be used to influence the public’s sentiment and willingness to spend. This is critical after an election in which the political party controlling Capitol Hill changes and – more important – during the holiday shopping season.
Without question the U.S. economy is beginning to quickly crumble. If you “peel away” the manipulative techniques applied to the economic reporting it reveals that every segment of the economy is now contracting. Even the factory orders report for October released yesterday – which showed a 2.7% gain over September – is still down 2.3% YTD vs the same YTD period in 2015. Strip away the transportation component and it’s down 2.7%.
With interest rates on the long end up over 100 basis points in a very short period of time, the Fed’s balance sheet has taken a big hit. It currently owns over $4 trillion in Treasuries and mortgage securities. Assuming an average duration of 10 years on its holdings, the market value of the Fed’s balance sheet has dropped 8.4%, or approximately $320 billion. As of this past Thursday, the Fed’s balance sheet showed $46 billion in book equity. If the Fed were forced to mark-to-market its fixed income holdings, the Fed’s net worth would be significantly negative – close to $300 billion negative. Think about that: the only thing backing the value of the U.S. dollar right now is the U.S. military and a Central Bank with a massive negative net worth. – excerpt from IRD’s latest Short Seller’s Journal
The Rest…HERE
