There have been rumors of manipulation of the stock markets for months now. As the economic news has worsened, people have watch in stunned amazement as the stock market has rallied. This market has rallied while “insiders” (corporate bosses who are in the know) are massively selling stocks and while capital has net flowed out of the markets for weeks on end. Today, the market was up, again, in spite of a raft of bad news (noted earlier here). Over at Zero Hedge, a possible reason for this:
…the Fed has continued to monetize Wall Street’s debts EVERY options expiration week since QE 1 ended… proving beyond a doubt that the Fed’s QE program did NOT actually end in March…
…last week Ben Bernanke pumped an additional $11.05 BILLION into the system ON TOP of the $11.15 pumped via the POMOs (the major banks who control sales of Treasuries – ed. note). In plain terms, the Fed juiced the system by $20+ billion in a single week, bringing its liquidity pumps RIGHT BACK QE 1 LEVELS.
If you want to know why stocks have rallied in the last month, this is THE reason. The economy isn’t improving and the European Crisis isn’t over. Nothing has improved. All that has happened is the Fed funneled money into the Primary Dealers who ramped the market…
The linked article has a chart which tends to confirm this assertion – that the Fed has found a means of pumping massive amounts of money in to the stock markets, thus keeping prices high and rising in spite of economic news which should have the markets in the tank. Why are they doing this? Likely because the whole purpose of TARP and “stimulus” has been to keep the largest financial institutions from going under.
There are two motivations for that action – primarily it is because Bernanke, et al are part of our failed financial system and simply won’t allow their friends to go under. Secondarily, it is because the economic theories believed in government and high finance hold that a financial crash followed by bankruptcy is the worst thing which can happen. In their understanding, that is what caused the Great Depression – that it was actually caused by a fall off in demand resultant upon the destruction of life and wealth in WWI and the “Spanish ‘flu” of 1919 entirely escapes them. In Bernanke’s mind, he’s saving us from disaster (and, as an aside, he’s doing what he can to protect the Democrats…a Dow at 5,000 wouldn’t help matters on November 2nd…and only the Democrats stand between the Banksters and complete disaster, for the Banksters).
We cannot be sure that this is happening, but the circumstantial evidence indicates that it is, indeed, the case. Our best means of finding the full truth is to audit the Fed, as some have been calling for. My preferred ultimate outcome is to abolish the Federal Reserve, entirely and leave our financial and monetary policy entirely in the hands of elected officials, who are at least vulnerable to popular discontent. Leaving it in the hands of un-elected bankers who meet in secret has proven a disaster, and is un-American, in to the bargain.
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