I give credit for this to Gary K., a client of mine, who wrote this to me, and I changed it very little. Thanks Gary!
“What if?” is a good question, and the answer is very simple. Of course it is possible for some entity to manipulate the markets. It isn’t difficult to do, especially if the entity has the ability to create electronic “money” out of thin air. Hasn’t Japan already admitted that they are NOW manipulating their markets? The markets can be pushed, pulled, and manipulated, but the ultimate end remains the same. The PPT can keep the stock market from crashing by buying, selling, going short, long, covering, manipulating, and all with printed money, but the P/E ratios of 33 make the ultimate end the same. Stopping a stock market crash with printed money, only postpones the other problems of hyper inflation, currency debasement, bank runs, withdrawals of savings, gold and silver going through the roof, and foreign withdrawals. All of these are happening now, to a small degree, compared to the future. The Fed can run, but it can’t hide. It can sweep the dirt under the rug, but the bulge in the carpet will grow till it can’t be hidden. Trading one problem for another, solves nothing. Solving the bankruptcy problem we now have, has only solutions that no politician wants to face up to, and implement. Solutions such as stopping the transfusion of our capital to foreign lands by enacting huge import tariffs, nullifying NAFTA, backing the currency with precious metals (if there are indeed any left in the US treasury), eliminating the fractional reserve banking system, getting rid of the Federal Reserve, eliminating huge portions of the federal government, balancing the budget, and stopping the huge pork barrel spending.
You can give the kid more candy to keep him from crying, but then you will ruin the kid by spoiling him rotten and making him useless. You can take drugs or alcohol to mask a problem, but it doesn’t solve it. Politicians can follow the Greenspan lead and go ever deeper into debt, with ever decreasing dollar values, but it won’t make the future solvent or prosperous. As each day passes, things get a bit worse, it seems. Admittedly, when Jimmy Carter was the President, we had huge inflation, and interest rates one can’t even imagine today. The hostages were in Iran, we gave away (paid them to take) the Panama Canal, and it all looked so hopeless, that no one could see a way out. Ronnie Reagan got elected, and even though the American spirit was sort of re-born, the national debt quadrupled. Officially, the national debt is now close to $7 TRILLION, and this is a fake, because it doesn’t include off budget items, and Social Security promises of $10 trillion at least. “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” – Frederick Bastiat
Currency debasement, is a process that goes back thousands of years. Every failed civilization has done it, and no one has yet stopped it, even though everyone knows how. Politicians and governments are bent on self- destruction it seems, and always at the expense of the citizenry. When people lose confidence in pieces of paper with ink on them, a terrible economic collapse is in the wings. Believe it or not, the buck has slid so far, that the Argentine Peso is up 30% against it. Worthless, against more worthless, it seems. Imagine, if you had taken dollars and bought literally worthless Argentine Pesos a couple of months ago, you would have made a 30% profit!
Politicians are buying time, as is Greenspan. I am not sure that Dubya knows the difference. Remember the WW II drawing that appeared everywhere, along with the caption “Kilroy was here?”
How about “Greenspan was here?” After all, Sir Alan appears almost daily, telling us we are on the road to recovery, or almost anyway. We’ve been hearing that for over three years now, and it’s getting a rancid odor to it. Of late, he mentions the fact that, ’derivatives might be a problem.’ That is putting it mildly Sir Alan! Have the various governments sold most of their gold to keep its price low, and bolstering their paper currencies? Gold and silver are the devout enemies of paper money. Does the US even have gold at Ft. Knox? A few years ago, locals saw huge fleets of armored trucks leaving the facility, and there hasn’t been an inventory since the Eisenhower years. If Goldfinger pulled his caper today, 40 years later, there might be nothing to find. James Bond maybe should let him have at it.
Manipulation is relatively easy, but the more manipulation that takes place, the bigger the price that must be paid, when the scheme is either uncovered or backfires. If governments have sold (“leased”) their gold to keep the market flooded and the price low, the end result will be that they will have no more to manipulate with, and gold will skyrocket in their currency prices, while the gold will remain the same, and still buy the same items it always has. Manipulation always hides the truth. Is it possible that massive amounts of stocks have been bought by the PPT (Plunge Protection Team) and that government owns much of all available stock? Is it possible that the stock market has already crashed, but is being kept alive by government manipulations? Maybe they haven’t actually “bought” any, but buy and sell and manipulate through futures, options, calls, puts, etc, and keep it high. Wouldn’t it be a twist of fate, if most people are out of it, and government is keeping it going through manipulation? They have done it with gold, and the COMEX has done it with silver, (the government admits it has none of that), why is it impossible for a government, fearing for its life, to grasp at any straw to prolong its life? If your ship had sunk, and you knew you were going to drown, wouldn’t you grasp any floating piece of wreckage, even though you knew the water was too cold for survival anyway? Naturally.
Americans are the most trusting people in the entire world. We are wonderfully trusting, and believe everything fed us by the DC gang, it seems. We believe, even though we know it is untrue, because we want to believe our rulers will never do wrong, mislead us, cheat, lie, or in any way be dishonest. We believed our stock brokers when they told us to buy Cisco and Enron. Would a stock broker lie? Hundreds of millions in fines, and trillions lost, proves otherwise. Would a government lie? Is it possible that we have maybe 10% inflation, rather than the 1.7% government tells us it is? Is it possible that the IRS rules and regulations are ten times as long as the Bible, because it is necessary, or is there an ulterior motive? Was the Patriot Act passed to protect us? Americans, like the Germans, Russians, and others in times past, always trusted their governments, to their eventual dismay. How long, before Americans lose their confidence in the American paper money and government that issues it? Most of you readers have already lost faith, but eventually, massive amounts of Americans will do so also. How long will it be? When it happens, all your gold and silver will be there to protect you, and won’t that be nice? If you haven’t already, protect yourself.