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  • The Manipulated Market and the Middle Class 4 comments
    Jul 24, 2009 10:39 AM

     

    Many writers on SA have suggested that the stock markets in the US have been and are being manipulated to serve the interests of the Government( our policies are working), Media(the elites know best) and Wall St( recapitalization of Big Money and escape from TARP and hence bonus limits or anty other limits on behavior).

    If one accepts this explanation, then an even more insidious notion has to be entertained. This is the thought that the Inside Money(ie Wall St and cronies in politics and media) is using the Outside or Dumb Money(ie  Middle class or small investor money, directly or through intermediaries) to create a financial  exit for itself  by encouraging the dumb money to buy financial, service and media stocks. Thus, the Middle class becomes the duped exit for the Upper class.

    But why exit finance, service, media stocks? 

    The upper class is also the fiat money class. It understands vastly better than the Middle class that fiat money means a  rapidly  eroding exchange rate beween the dollar and real assets. Therefore, a year or two before this erosion is painfully manifest in high and sustained inflation( ie escalating dollar price of real assets but not an escalation of real asset prices versus other real assets such as precious metals versus oil or industrial metals versus  agricultural land  or rare earths versus natural gas) the upper class quietly  redeploys the money from  its smoothly engineered stock market exit into real assets. It callously leaves  the middle class stuck with vapor assets in the form of finance, service and media stocks which, of course , lose value once the exit is completed and the productive economy continues, at best, to languish. 

    Then, when inflation arrives and real assets soar in dollar terms, the real wealth of the upper class is not only preserved but  tangibly  increased. The middle class is further impoverished , the lower class is given more  fantasy money bribes to keep it pacified even though more dollars buy fewer means of living(a fact the lower class in its ignorance , muttering resentments and digital  media addictions is unable to grasp)and the upper class garners an even more  unearned and underserved share of real income and real wealth. Gloating and self congratulation for the upper class, economic and social  misery for the middle class and  financial  fumes for the lower class.

    The manipulated stock market is working very well indeed: for its few masters.

     

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Comments (4)
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  • Tom Au, CFA
    , contributor
    Comments (6879) | Send Message
     
    Very good article. You told it like it is.
    24 Jul 2009, 10:44 AM Reply Like
  • Swashbuckler
    , contributor
    Comments (715) | Send Message
     
    Your comments and your Instablog add much to the forum. Please continue with your postings.
    24 Jul 2009, 11:08 AM Reply Like
  • Dumming Down
    , contributor
    Comment (1) | Send Message
     
    This is everything I was raised to believe in for my future Ameri-Can-Operation. Well done!

     

    The Non-Stimulating Stimulus Bill [View article]
    The Stimulus Law(its a law, not a bill once its been enacted) is succeeding very well in all its covert objectives, which are :
    1. Rapidly collectivize the economy
    2. Further concentrate wealth, income and power
    3. Compress the Middle Class, which may be aroused to open rebellion against the subversion of the Constitution----- unless it is swiftly and decisively intimidated and demoralized
    4. Squeeze and bankrupt small and medium enterprises: the locus of the opposition to collectivization and the principal obstacle to the concentration of income and wealth
    5. Totally co-opt the incompetent, deceitful and avaricious top executives and Boards of the biggest financial and industrial companies in the US
    6. Transform the MSM into the subservient propaganda arm of the State
    7. Instigate and institutionalize class warfare by expanding the lower class at the expense of the middle class via coerced downward social mobility
    8. Discourage useful innovation because innovation can bypass bad Government; thwart real talent because real talent can be a threat to entrenched Bosses ; exile risk capital because risk capital leverages innovation and talent
    9 Sep 2009, 10:36 PM Reply Like
  • Paul H. M.
    , contributor
    Comments (1035) | Send Message
     
    So if everything is so F'ed up, why are you sitting on an investment site typing about it? Get off your ass and do something!
    7 Aug 2010, 12:56 AM Reply Like
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