Tag: correlation

THEY’RE GONNA NEED A BIGGER BALANCE SHEET

Driving home from work on Friday night I found it terribly amusing listening to the “business journalists” on the local news station trying to explain the 531 point plunge in the Dow and the 1,105 point plummet from the Tuesday high. The job of these faux journalist mouthpieces for the status quo is not to report the facts, analyze the true factors underlying the market, or seek the truth. Their job is to calm the masses, keep them sedated, and paint the rosiest picture possible.

The brainless twit who reported the stock market bloodbath immediately went into the mode of counteracting the impact of what was happening. She said the market is overreacting, as the country has strong job growth, low inflation, a strongly recovering housing market, and an improving economy. The fact that everything she said was a complete and utter falsehood was exacerbated by her willful ignorance of the Fed created bubble leading to the most overvalued stock market in history. How can these people pretend to be business journalists when they haven’t got a clue about stock market valuations and just say what they are told to say?

Anyone who listens to a mainstream media pundit, talking head, or spokes bimbo deserves the reaming they are going to receive. They are paid to lie, obfuscate, spin, and propagandize on behalf of their corporate media executives, who are beholden to Wall Street bankers, mega-corporations, and the government for their advertising dollars. The mainstream media is nothing but entertainment for the masses, part of the bread and circuses designed to distract the dumbed down, iGadget addicted, ignorant masses.

The entire stock market bubble has been created and sustained by the Federal Reserve and their QE and ZIRP schemes to prop up insolvent Wall Street banks, enrich corporate executives, and produce the appearance of a recovering economy. The wealth was supposed to trickle down to the masses, but the trickle has been yellow in appearance and substance. The average American is far worse off today than they were in 2007, with the Greater Depression Part 2 underway.

Continue reading “THEY’RE GONNA NEED A BIGGER BALANCE SHEET”

CORRELATION OR CAUSATION?

Is it just a coincidence that the Federal Reserve’s 350% increase in its balance sheet has exactly tracked the 200% increase in the S&P 500 over the last five years? Inquiring minds want to know whether the five years of QE created the stock market rally or whether it is just a coincidence that they coincided. The Fed is supposedly done expanding at the end of this month. Do you think that has anything to do with the volatility in the last couple weeks? Where do we go from here? 

Is the stock market like a shark? If it doesn’t keep ingesting QE, does it die?

CORRELATION, CAUSATION, OR COINCIDENCE?

With some volatility, the price of gold had tracked the national debt and the debt ceiling  from 2000 through 2012. It doesn’t take a goldbug to figure out that if you increase your debt from $5.7 trillion to $16.7 trillion over 12 years by printing paper fiat dollars, those dollars will become worth less in relation to a scarce commodity that has functioned as money for over 2,000 years. The price increase of gold is simply a matter of supply and demand versus the USD.

But something unusual has happened in 2013. The national debt has continued to soar. Just because the government stopped counting on May 21 doesn’t mean it hasn’t continued to go up by $2.5 billion per day. Your government says the national debt stands at $16.747 trillion today, which is $48 billion higher than the official debt limit. In reality, the national debt has reached $17 trillion. By the time Obama leaves office it will be $20 trillion.

Despite the rhetoric in Washington DC, no one will be cutting anything. Obamacare will cost far more than any CBO projections. The economy is in recession, so tax receipts will be far lower than projections. We will surely fight another war or two between now and 2016.

So was the 12 year increase in gold prices that tracked our increase in debt just a coincidence? Does the 2013 disconnect prove that gold prices have no correlation to debt and dollar debasement? Or has there been a concerted effort by the Federal Reserve, the government and the Wall Street banks to suppress the price of gold artificially through the paper gold markets and use of derivatives? Do they know that the price of gold reveals their debasement scheme?

If you believe that artificial suppression will fail and that gold truly is correlated to the amount of debt being accumulated by your political leaders and money printing (QEternity) being done by Ben and his boys, then you will conclude that gold would be fairly valued at  $1,800 per ounce today. It will be fairly valued at $2,200 per ounce by the end of Obama’s term.

Do you believe Bernanke and Wall Street will win this battle? Or do you believe the market will ultimately prevail?