This article was originally released via our maalamalama free newsletter on 6 August 2015. To subscribe, please sign up at maalamalama.com
There is something happening in the global economy that definitely scares the bejesus out of the Central Bankers now because the levels of manipulation to keep US stock markets propped up and gold and silver prices pressed down far exceed the similar shenanigans I witnessed that preceded the approximate 50% 2008 US stock market collapse. In the 1962 Ray Bradbury novel, Something Wicked This Way Comes, a Mr. Dark arrives in a Midwest town in the US with a traveling carnival and displays mysterious powers to seemingly grant its residents their secret wishes. Many quickly become enamored with Mr. Dark’s ability to grant their wishes, though in reality, he is a demonic spirit that tricks the citizens of the town into bowing down in servitude to him.
For all those riding the US and Chinese stock market bubbles and the various RE bubbles around the world, Central Bankers are your Mr. Dark. We may think that our wishes are being granted by rising asset prices on the back of Central Banker currency devaluations, but in a world in which their literally is no price discovery any more and only Central Banker price setting in many markets, if we believe the rises in the various stock market and real estate bubbles around the world are founded on price discovery, when in fact Mr. Dark is setting prices artificially high (RE, stock market bubbles) and setting prices artificially low (gold, silver, oil, copper price drops), we will not be prepared at all for when Mr. Dark decides to unwind his devious plots that have gained our admiration.
When Central Bankers decide to unwind all these bubble levitation schemes, and they will, as all bubbles are deliberately popped, then this is the point that that we too will realize, like the citizens of Mr. Bradbury’s novel, that we have sold our souls to Mr. Dark in rooting for these bubbles to keep growing larger. Why? Because Mr. Dark cares nothing for us other than to use us for his own selfish reasons, only to discard us when he is done using us. As quickly as Mr. Dark provides a benefit to us trick us into supporting him and binding ourselves to him, he will maliciously pull these benefits away and crash us into darkness. Just ask the millions of Chinese housewives that were bankrupted in June from the Chinese market crash if Mr. Dark cares about them.
As no one can predict exactly when Mr. Dark will be ready to crash the various stock market and real estate bubbles into darkness, one should, at a minimum, be prepared for this event. My best guess (with the prime word being “guess”) would be that Mr. Dark will pull the carpet out from underneath the feet of the people at some point in October 2015 to January 2016, with the caveat that this timeframe can change as I analyze more data each subsequent week.
I explained in one of my recent issues of this newsletter, how on 20 July 2015, the bankers’ explanation of shutting down the NYSE because of a software update “glitch” was extremely implausible. On the contrary, by shutting down 60% of the trading volume of the S&P 500, which captures a whopping 80% of US stock market capitalization, for a few hours that day, bankers quite possibly resorted to temporarily making large volume selling in US markets “illegal” for a few hours to stop a US stock market crash and sell off that may have been triggered. Though retail investors were still able to trade on other open numerous exchanges throughout 20 July 2015 as their trades never get shuttled through the NYSE, many retail investors enamored with “Mr. Dark” blindly accepted Mr. Dark’s explanation of the NYSE shut down that day because they think they are setting the market behavior and contributing to market discovery and have no clue that they are at the complete mercy of Mr. Dark’s artificial setting and manipulation of markets. US markets are made these days, and never discovered.
If we break down more recent trading on the S&P500, for days on end, nearly every single day, if you look at the 1-minute and 2-minute intraday charts, there has been huge buying volume right at the couple of minutes that mark the market open, and again right at the couple of minutes that mark the market close, with very little activity in between, respective of the volume that takes place at market close and market open. Even if the US market sells down throughout most of the trading day, on many days when this happens, “someone” steps in on almost a daily basis to buy huge volumes of stocks on the S&P500 index at market close and then again at market open. I’m guessing this “someone” is Central Bankers or institutions acting on behalf of Central Bankers (Mr. Dark).
Tell me, what other purpose would massive buying at market close on down days have other than to keep US markets artificially propped up and to prevent a US stock market crash? Furthermore, this type of trading when nearly all daily trading volume happens at market open and market close, and nothing in between, is the type of broken trading indicative of a market which is controlled by computer algorithms executed by huge institutional players that are setting market prices rather than allowing any market discovery to take place. In other words, even when the market trades within a tight range as it has the entire year and produces an illusion that all is calm below the surface, things can head south very quickly, rapidly and unexpectedly for those that never look underneath the hood to understand the mechanisms that have been driving price for the entire year.
Goldman Sachs bankers have speculated that PBOC (People’s Bank of China) bankers have stuffed nearly a trillion Yuan into the Chinese stock markets to re-levitate them after it lost nearly 35% from mid-June to early July, and that they have another 1.1 trillion yuan at their disposal to keep buying Chinese stocks if the Chinese markets do not re-levitate from their initial 900 billion yuan Keynesian injection.
For a while, this “do anything to reinflate the bubble” policy of foolish Chinese central bankers worked, and they reinflated the Shanghai composite index by nearly 18% in just two weeks after massive rapid losses. However since then, the Shanghai composite has shed 11% of those 18% reinflation gains in the last two weeks. The Shanghai Stock Exchange, in June, was reported to have a market cap of about $5.9 trillion. If the PBOC created about $144 billion ($900 billion yuan) or 2.44% of the market cap of the SSE to try to reinflate the crashing Chinese markets and thus far, it has had very little sustainable and lasting effect, could it be possible that in order to keep the US stock market bubble from popping, the US Federal Reserve bankers have resorted to directly buying stocks as well? In the US, the Feds always deny that they are directly buying stocks in US stock markets even though there is substantial circumstantial evidence that they have been buying S&P 500 futures for years to support US stock markets, which is an action that is very similar to directly buying stocks as futures action sets the tone for market behavior that day.
In any event, there is no doubt that a large institutional buyer or buyers are the ones causing the huge volume buying spike at market open and market close in the S&P500 index. Whether or not these buyers are merely influenced by US Central Banker S&P500 futures buying, or if Central Bankers are also now directly participating in these shenanigans is irrelevant. What is relevant is that market levitation through fraud can not last forever and it will eventually fail in the US as it failed in China. And while the Chinese measures will likely re-levitate Chinese markets for a short-time, these PBOC re-levitation maneuvers will most definitely re-fail again in the not-so-distant future, causing another downward spiral in Chinese markets as violent as the one that happened in June. And it will be at this time, that the price trends of US markets and gold/silver of the past few years will violently reverse as truth trumps manipulation.
As always, please feel free to share any of the above information with friends and family by simply clicking any of the “share” buttons at the top of this newsletter. Have a great day/evening everyone! Please read all republishing rights carefully as stated at maalamalama.com/wordpress
