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This post was edited by abramicus at 2013-5-19 12:49|
Western Media Focuses on the Dow and S&P500 to Fool the Public About the Economy.
The Dow is only 30 stocks deep. Its capitalization represents less than 1% of the US economy. To say that the US economy is better or worse because the Dow is up or down is at best a wild guess. In fact, the Dow can be hijacked by program traders from big brokerage houses that have as their client, the Fed, and thus can be made to go up or down as the biggest boys dictate.
Eventually, the small investors will be able to influence the Dow, but for now, only the big boys can win, because only they know where the Dow will go, since they can force it to go where no man has gone before. Call it Dow Trek Part X.
One case in point is the lead up to the North Korean Crisis when the world was in suspension as to what Kim kould do. He threatened to unleash WWIII no less, even though everybody knows he said that tongue in cheek, since he has never demonstrated the ability to send anything far enough to wreak such havoc. Nevertheless, the threat was made, and the world was worried. What did the major market indices do? THEY WENT STRAIGHT UP! It did not reflect this undeniable public concern. Instead, it was made to reflect some degree of blackbox confidence that all will be well. No longer are the markets reflecting public sentiment, they are now serving as the tools to influence it.
Even the gold market is being manipulated massively with tens of tons of gold being dumped on the market, that reminds you of the Asian Currency Crisis of 1997, when borrowed HK dollars were being dumped on the currency market. And surprisingly, the public absorbed the shock, and gold regained its value. Of course, the public's fund is nothing compared with the infinite funds of the monetary authorities, so in the end, the public will lose its shirt on its sound investment in gold, because it does not have the staying power of the monetary authorities, since eventually, some will need their money to repair the roof, buy a car, or pay their bills, then they will have to sell their gold in an artificially depressed market, causing it to drop even further. In short, the public is now, financially, cornered like cattle without any exit possible. Their savings are destined for loss of purchasing power if kept as deposits, with near zero interest rates. It is a very sad and sorry state that the economics professors have the nerve to call a free market. It is free only to the extent that they are ignorant.