Storm Clouds Are Gathering...

There is a now widespread universally held belief, especially amongst “dumb money” market participants, that the markets cannot drop because the Fed is going to keep creating money in ever greater quantities to throw at pumping them higher and higher. This erroneous belief appears to be based on an assumption that the Fed cares about the economy or the welfare of the citizenry, when the reality is that the reason it exists is as a “wealth transfer engine” whose prime function is to serve as a mechanism for transferring the fruits of the labor of the population at large to the elite cadre at the top of the pyramid, and they even have a pyramid on their Federal Reserve notes. They achieve this through “systemic inflation” which with a fiat money system in place now for many years enables them to print unlimited quantities of money that they gift in the first instance to themselves and their crony associates and large favored corporations, and then let the rest out into the economy, with the tab for all this being pushed onto the hapless citizenry in the form of inflation. This is why the dollar has devalued by about 97% in purchasing power since the Fed came into existence in 1913.

Now, with the fiat system approaching its nemesis as debts and money creation go parabolic, the gloves are off and they don’t even bother to make any pretense about it – they create trillions which they hand straight to big favored corporations and Wall St banks, with the implied challenge to the ordinary citizen being “You don’t like it? – well, what are you going to do about it?” They are not just above the law, they ARE the law and they can and will do as they please.

Given that the Fed’s primary objective is to transfer wealth from the masses to the elites, and given that after months of the stock market trending higher, Dumb Money has been piling into the market again as Smart Money exits, as we can see on the latest Smart – Dumb chart below, it would seem irresistibly attractive to them to pretty soon rip the rug out from under the market and send it plunging again, as they did in the Spring, and then move in and pick up Dumb Money’s holdings when they sell in distress at the bottom, and start the whole wash, rinse and repeat cycle again – and if they crash the markets soon they should be able to achieve a long-held objective of getting rid of Trump for good measure since the markets would not recover enough by election time for him to capitalize on it.

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