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Gregory Mannarino's  Instablog

Gregory Mannarino
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I started my financial career working for the securities and trading arm of the now defunct Bear Stearns before thedot-com bubble. I am an active trader of the capital markets. I have published several books pertaining to finance, global economics, and equity trading; My most recent book is... More
My company:
TradersChoice.net
My blog:
MarketReport
My book:
Money Matters.
  • The Federal Reserve's Backdoor QE Is A Terrible Liability For YOU.

    A great many people seem confused, including pundits on the financial channels, as to why this stock market has been on a one way trip higher ever since the Federal Reserve announced an "ending" to it's own quantitative easing program.

    (click to enlarge)

    Well simply, the Federal Reserve has put in place a very ingenious, and dangerous scheme-make the banks themselves carry on it's QE program!

    Although I have written about this before, and in fact I may have been the first to openly discuss it publicly, many people continue to write to me asking the question as to why this market continues to move further and further away from the fundamentals which support it. Well here is the answer..

    What the Federal Reserve has been setting up for years in preparation for ending the expansion of it's own balance sheet is this. The Federal Reserve has required the big Wall Street banks to keep putting excess cash in reserve-not lending it out. Understand, this "keeping of excess cash in reserve" is counter productive for any bank, and this is because in order for a bank to make a profit on cash it has to lend it out. However in this case what the Fed. Was actually doing was setting up a "backdoor" quantitative easing program which would simply be carried on by the banks themselves.

    The Federal Reserve "sold" this action to the public by stating that these extra reserves were to keep the banks liquid in the event another financial crisis hit. Well this put the general uninformed public minds at ease however, this "keeping of extra cash in reserve to keeps the banks liquid" was a blatant lie.

    What was actually being done directly by the Federal Reserve was a set up for their next phase of public deception, and that was this. Just prior to the Federal Reserve announcing it would end it's own QE program, the Federal Reserve began to REQUIRE the banks to buy "liquid" assets, aka DEBT. In other words, as the Federal Reserve itself announced that it would no longer be buying debt, (a major component of it's QE program), the Federal Reserve would now be FORCING the banks to do it!

    Thus continuing its quantitative easing program through "other means."

    Here comes the Federal Reserve's next problem.

    Arguably the Federal Reserve has an unlimited balance sheet however the banks do not. As the Federal Reserve requires the banks to buy debt using their cash reserves they will see their balance sheets explode to the upside. What this also means is as the banks reach a critical mass with regard to their own exposure to debt, the Federal Reserve will once again have to institute yet another round of QE to keep the system propped up.

    THIS MECHANISM IS DIRECTLY EXPOSING YOU AS A CREDITOR/DEPOSITOR OF THESE BANKS TO TOXIC DEBT..

    The Federal Reserve via this backdoor QE mechanism is directly exposing the banks to debt which in my opinion is toxic. What this means is the depositors of these banks, you, are also being directly exposed to this toxic debt. We all know that the global issue of debt is at critical levels and despite this the world central banks keep fueling this debt monster. The debt is in a bubble. In fact it is the largest financial bubble in the history of the world and this bubble will burst. With the Federal Reserve requiring banks to have more direct exposure to this debt a very dangerous situation is developing. One which as a depositor/creditor to these banks, you are being directly exposed to and it is a terrible liability.

    At the moment the bubble in debt bursts the debt being held by these banks will become illiquid, and as a creditor to the banks (because that is what a depositor actually is), how do you believe that will effect your "investment" in these now illiquid banks?

    Check out my business day MarketReport. Click on the picture below.

    Nov 26 12:47 PM | Link | 5 Comments
  • Internet Censorship Is Just The Beginning.

    **UPDATE: YouTube has now released all my videos! Thank you all for standing up/writing to YouTube and telling them you will not tolerate censorship! We won.**

    Below is a screenshot of my latest two MarketReport video blogs which are "under review" and YouTube will not publish.

    (click to enlarge)

    As many of you already know, I am being actively censored by YouTube/Google at this time. For years now on my business day MarketReport I have been taking the "spin" out of the nonsense which the mainstream media has been force-feeding the masses, and now it seems I am squarely on their radar screen. Although I consider this "censorship" a badge of honor, their action against me clearly demonstrates that TPTB are trying to exercise total control of the information currently available through alternative media sources.

    People if we allow censorship on the internet to continue here in America then we all deserve what is coming to us. We already see censorship/curtailing of information in regimes/countries around the world. Will we let our country be next?

    If you are not willing to go down without a fight then please contact YouTube/Google and tell them you will not tolerate this kind of action., your "right to know" is being threatened directly.

    Will you stand up to this or just do what they want, just shut up and take it?

    It's up to you.

    Contact YouTube/Google and let your voice be heard.

    Click the following link if you are ready to stand up and say something: Contact YouTube.

    Nov 25 6:18 PM | Link | 8 Comments
  • The Expansion Of Wars/Government Spending Does Wonders For GDP.

    (click to enlarge)

    Today's upward revision of 3rd quarter GDP took economists by surprise again!

    Really?

    How is it that data like this ALWAYS seems to surprise them?

    Either the economists are frankly stupid, or the data is consistently faked.

    Now I am not saying that this new upward revision in GDP data was in fact faked at all, to the contrary, I believe it is very real. However it has nothing to do with ANY improvement in the US economy.

    What the vast majority of people fail to "factor in" to the GDP equation as they are force fed the nonsense, is government spending.

    Government spending IS a major component of GDP. Heck as the current wars we are involved in all over the globe get expanded, and our military involvement grows, GDP could potentially go parabolic! But does that mean our economy back here in the states is getting better?

    Sure the "war economy" will pick up exponentially as cash spending to support the "war effort" will go through the roof, but how does that actually help us here at home?

    Ah but it does! It is a dollar propping up mechanism and it CANNOT STOP!

    You see all this government spending: the funding of wars, Obamacare, now President Obama's amnesty for illegal immigrants will add trillions to government spending which will also be added to our national debt, but it will also do wonders to keep our GDP moving higher, thus propping up the dollar.

    All of the epic spending by the government adds to GDP, but as we near the end of the debt based economic model we will also see our national debt explode to the upside with no way to stop it.

    So as the powers that be ram this garbage data down all of our throats as GDP rises, pay attention to the debt crisis.

    Oh you have never heard of the debt crisis we are in? Then click here: Global Debt And The Human Bubble.

    Check out my business day MarketReport. Click the image below.

    Nov 25 12:36 PM | Link | 3 Comments
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