How the Stock Market Goes Higher?

Ten percent of the population owns eighty percent of all stock.  That group doesn’t trade. They hold. There is no other place to put their money. Wealth has never before been this concentrated. As long as government policy is to assist and enhance asset prices, very few of the very wealthy will sell off any of their shares.  Ordinary investors have much of their holdings in IRA accounts. They will hold under almost all circumstances rather than pay a withdrawal penalty.  Corporations constantly buy back shares as a way for insiders to pay themselves as much as possible as quickly as possible. Central banks around the world are buying stocks outright.

As I have written many times, rigging the stock market will destroy the country, markets, government and lives. It will drop when the damage can no longer be hidden.  It will take evidence of destruction to start a selloff that can’t be contained.

Rarely do trends change in a dramatic way. At the top, supply may exceed demand by just a few shares. A large decline develops when new demand fails to come in and absorb supply. After some give and take the trend finally gives way and more sellers are drawn in.

With modern technology, the entire market can be closely monitored and the consortium managing the market need only buy a few shares to bolster the trend of any stock. Oddly, traders and even hedge funds still trade as if they are playing the game against others just like themselves. Almost all of daily volume is short term trading. Every time a stock is shorted, demand is created because the stock that is shorted must be purchased. When the consortium needs to buy a few shares, they do so and they are constantly forcing other traders to cover their shorts.

Algorithms are complex but the circumstances they create and exploit are simple. All one need do is observe the trading during the day and it is easy enough to see the circumstances the algorithms create and exploit.  What is important for private parties is to to know that destruction will eventually follow and it may be impossible to make a profitable exit.

Patriots are not in charge of goosing the stock market. Any losses you incur are not caused out of a desire to hurt you. You might just happened to be there and get whacked.  None of it is personal.

For all of this to work, the American public must continue to be completely ignorant. Basically, Americans for the most part still believe just about anything they are told.

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About Fantasy Free Economics

James Quillian is an independent scholar,free market economist, teacher of natural law, teacher and originator of the Fantasy Free approach to economics. James Quillian does not believe lies. Contact: news@quillian.net
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