Monday, June 16, 2014

Unlimited Supply, Artificial Demand

It should come as no surprise that central planners, with their unlimited supply of paper (with which to manage expectations, therefore demand) have created artificial demand in the equities markets by "investing" a mere 29 Trillion USD in equities collectively.

Despite the typical conspiratorial drama of the underground financial press that this too was done "secretly", one would have to have been comatose between 2001 and 2007 to have somehow missed central banks gobbling up the fraudulent "exuberant valuations" of the real estate equities market from that period, after that bubble had been stretched beyond it's limits by their primary dealers.

So today we have a stock bubble fueled by 29 trillion in "central bank balance sheet credits". All in an effort to have 401K plans and similar retirement savings vehicles plunging head first into the great miracle of the rising stock market, which (like the gold market) continues to confound investors into making counter-intuitive bets against counter intuitive markets.

Unlike the little people, who must earn their betting chips through their daily labors, or borrow them through debt, central banks and their primary dealers (commercial banks) simply create money from thin air (unlimited supply) and deploy it to create artificial demand (manage expectations).

The artificial demand is the universally successful promise of "something for nothing". "I will take my hard earned money and invest in stocks, like the Smiths. (they were smarter, and got in earlier, and made a killing)", say the Jones's, until 29 trillion dollar credits later, EVERYONE is funding the stock market Ponzi scheme with their hard earned surplus wages.

And we all know the bubble will burst ... but every day it moves higher we lose to inflation ... so we must risk some of our savings to get our piece of the Ponzi dream ... and so on.

This is the series of booms and busts, winners and losers, fools and thieves, which a debt based monetary and financial system depends upon for its sustenance. The true winners are the generational wealth dynasties who move markets and act upon the movements first, and the suckers are everyone else, plus a handful of the lucky, who'll lose it all next time, because luck, like hope, is not an enduring strategy.

Not everyone supports this state of affairs, but everyone supports the illusion of "something for nothing", rich and poor alike, and the 1% consistently collect something for nothing, off the backs of losers who support the illusion.

Life has always been this way, the scam simply gets repackaged for our modern era. In a debt-based fiat system there will always be an unlimited supply of artificial paper wealth (29 trillion of it for today's topical example) to drive artificial demand to invest earned, real wealth into Ponzi bubbles (wealth earned from nothing).

Gold naturally regulates this insanity when it resumes its historic function as a freely traded focal point wealth asset. No conglomeration of central banks ever could or ever would "invest" tons of gold into the "equities markets". It is ridiculous to even consider the idea of such a play.

Gold is not used for betting. It is what we cash our fiat chips in for, in the game of wealth. The little people live and die by our betting chips - forever playing the game of debt. True wealth lives and dies by gold.

When debt dies, the truly wealthy will not be holding it into the next system.

4 comments:

  1. Hello Roacheforque my friend. I enjoy reading your thoughts here. I discovered your blog via the FOFOA site and felt your comments were always interesting and well thought out. I see others typically do not comment here, but I wanted to thank you for sharing. At least there are no trolls pestering you!! LOL........Best regards my Freegold comrade........Aurora

    ReplyDelete
  2. Hi Aurora, thanks for stopping by. Yes, I think we're still well under the TROLL radar at least for now, and not likely to have 700 comments between posts either. Cheers!

    ReplyDelete
  3. How interesting that the central banks did not use, say 5% (~ $1 trillion) to buy more gold than they already have. I do not have those recent year CB gold purchase numbers handy, but I doubt that it is anywhere near $1 trillion, correct me if I am wrong. Imagine: central banks buying gold at large scale. LOL!

    I like to see other gold blogs too. Best of luck! Oh, and re TROLLS, that is a sign of SUCCESS! IIRC, you can always zap their comments, but I just leave my (very few) troll comments up at mine.

    ReplyDelete
    Replies
    1. Honestly I cannot say for sure what CBs are buying, or holding, as regards physical. I do not trust the numbers (including these) but you have to start somewhere.
      I don't think Eastern central banks have quite the same attitude toward gold as the West, but it certainly appears that the commerical banks make no distinction East vs. West as regards debt and the dollar system.

      Delete