Fantasy Free Economics

I must be alone in the world in explaining that the financial markets are not just rigged overall but on a second by second basis. Today;s rally is being explained as being a short squeeze or a dead count bounce. It is neither.

This is an organized effort to restart and maintain the bull market. If the ALGOS can make a snake, they have substantial control over the market. So, they do in fact still have plenty of control over the market. ‘

To accomplish this task, a low volume atmosphere must be maintained. Long term holdings must be kept off the market. How are long term holdings kept off the market. All it would take is phone calls explaining to potential sellers that prices are going up. The word is, you will get a better price. We will see to it that you do.

Have you ever seen a true short squeeze? With a short squeeze, the averages would not gap up and then stay in a consolidation pattern for the balance of the day and then resolve upward at the end of the day.

As of yesterday, still, only 14 percent of stocks were above their 200 day moving averages. This is not a dead cat bounce because only a few stocks are actually bouncing. A handful of stocks are rocketing.

From here on, the market will rise as much as it is possible to make it rise.

With respect to market manipulation, the consortium doing the managing knows you a lot better than you know them. They are also far more intelligent than I am.

One thing that is generally not recognized is that they have enough buying power to move the market based on their own buying power. As they are successful in doing this, they have nothing to lose as long as the market doesn’t go down. One unrecognized aspect is that there is an ongoing effort to consolidate asset ownership among a handful of elites.

So, how long will this new chapter last? It will last as long as they can make it last.  When the effort fails, that is when it all collapses.  I am not counting on that happening today, but who knows? Chances are that it will look like the averages are about to collapse for the entire trading day. But, at the close, there will be a rally. Goal one is to close at the high for the day. If that doesn’t work out, then the goal is no black candles. For sure, the market must not be down for the day.

As long as there isn’t a complete collapse, trading will begin in the morning with a new and improved plan. Look for low volume for the foreseeable future. Look for the averages to be slowly ratcheted  higher over time. We have all seen this game plan before. Despite the negatives, this can go on for a mighty long time.

I sent my friend Sidewalk Sam in East Texas, an email showing that others are now predicting inflation just as I am. He thought the content was so on target, he suggested my posting the text of that email because it is so on target. So, here it is.

I can’t convince people of how simple this is.  The truth is not used in politics. It isn’t used in the media either.

It is one thing to entertain this intellectually. Acting on the basis that politics is all lies is harder to do. That is the difference between knowing and understanding. and experiencing.

Anything said in the media today reflects the agenda of those who control the media.

First , it is “let’s all fear deflation”. That went on for years. Now,  it is all “we must fear inflation”. That means buy now before the price goes up even more. All of that is agenda driven. None of these people can predict anything. Check their track records.

Their fear of deflation is real. Deflation works against them but helps everyone else.. Their fear of deflation is well founded. So, when a downturn, which is deflationary, is in the offing, they are even more scared of deflation. Therefore the inflation creating becomes elevated.

This has nothing to do with knowledge about economics. It comes down to figuring out what a bunch of liars are going to do next.

Just last week, I added some to my blanket positions in Bear ETFs, mainly TZA. I also own TECS, FAZ, SD and  BIS.

None of these are large positions. Altogether I am in negative numbers. I would rather not be, but given my system of trading, that is unavoidable sometimes.

I am not short a single share yet, but I will be. Today’s traders are accustomed to bear markets that snap back like a jack knife. That is not going to happen this time. I am looking at a decline that lasts no less than two years.

So, I am not in a great hurry to load up on shorts. The ALGOs control the direction of the market, but only to the upside. The ideal time to short is when the ALGOs are no longer relevant. When long term holdings start hitting the market, they will be helpless with respect to their trend guiding efforts.

My goal as a trader is to get in and stay in whether long or short for the duration of a move. I would be short up to my neck right now, if the market was not so adeptly rigged up to this point. Further, I don’t know what heroic steps the government will take on behalf of our betters, in terms of a wealth saving programs. I think we can count on some collective efforts to save those who count.

I never use stops.  With the ALGOs in charge, a stop is as much as a guaranteed loss. Without the ALGOs, I don’t need stops anyway.

The ideal short for me is a stock that will eventually fall off the board and land in the corporate grave yard. After a bear market is over, many stocks will be destroyed. My hope is to never have to cover.

So, what I am looking for are stocks that are not going to survive. I don’t have a list yet. I am at best an average stock picker. If anyone has idea with respect to good short sale candidates, I am listening.

My first criteria in this effort is a company’s utility to society. As corny as this may sound, stocks with no utility to society are the ones that end up on the pink sheets sooner or later. Big tech, Big Pharma, Big Insurance and others currently have a negative utility over all. In other words they only take and never give. By give, I don’t mean by means of charity. I mean, those which in one way or another enhance lives over all. The industries, just mentioned have enormous political power.  That power is diminishing rapidly. A better bet is to find the smaller players in these industries and short those.

I don’t have the time to research all of the opportunities. No no one else does either.  That is why I am suggesting collaboration.

None of this is advice. It is just what I am personally doing. If I ever give you advice, don’t take it. I can be right ten times in a row, and then give advice. it almost always backfires.

This song was never meant to be prophetic. I wrote it in 2009, long before Covid or anything else that is going on in today’s world.  The original version has been on YouTube for years.  When I posted this new version on YouTube, they first cancelled my channel.  It was reinstated, but they stopped showing my videos.

Now that it actually is 2022 and not 2009,  it turns out that it might be prophetic after all. The future will not manifest in the exact way it does in the song. But, our future in the country, for sure will follow a similar pattern.

We have a society of completely homogenized citizens. Government makes all of life’s important decisions for them. They are completely clueless as to how to live in a society where they are not managed by an authority and will be confounded as to how to fend for themselves in the hard times to come.

What will happen? They will offer themselves as devotees to the first new authoritative figure who seeks to guide them. They will end up worse off than before. We very likely will send our sons and daughters off to war.

At any rate , times are getting weird. They are getting weirder with every passing day.

In 2005 I began to notice chart patterns which were previously useful were turning into traps, For example, when a head and shoulders top  pattern was  completed, a short squeeze would ensue. Every now and then this is normal.  But on every single trading, it is not.

In spring of 2006, Henry Paulson became the first activist Treasury Secretary in history. From spring of that year on, the market had an invisible floor under it.

The lower volume was, the stronger the market would be. The volume chart began making a perfect parabola pattern with few exceptions. Then there was the emergence of the snake pattern, on minute by minute charts patterns, never seen in history  before. All action occurred in the first and last hours. Could there be a conspiracy, devoted to elevating asset prices? Would it even be possible? Could it be done? The 100 or so richest folks in the world  certainly have enough money and power to do it. Would they? A better question to ask is Why wouldn’t they? But, Woo, James, that is conspiracy theory, therefore it couldn’t be true. Right?

Adam Smith, is well thought of, but his observations are routinely treated as platitudes..Some of us take his wisdom to heart. If Adam Smith is to be believed, it is nearly impossible that stock prices are not thoroughly manipulated. So, who should we trust here?

Lets look at a chart of the Dow along with the percent of stocks over their 200 day moving averages. Around 26 percent are above their 200 day moving averages. This is the level that would be expected at the bottom of a bear market. Is this the bottom? I am betting that the bottom is about to fall out instead.

This is based on the whole bull market being phony from the beginning. The ingredients necessary to move it higher are missing. There is one caveat… that means nothing….. will be done to try and save it. I made a similar point in the article below. In 1987, the market did suddenly crumble but there was a recovery. If we experience that kind of event this year, it will keep on dropping. Any recovery won’t start for at least two years. Our system is so corrupt, any recovery at all should not be taken for granted.

A One Day Stock Market Crumble

The Case For Deflation PDF Version
Inflation is the current problem and fear. That is fine for mainstream economics. But, thinking is not allowed in economics. First, deflation is not bad for an economy. Inflation favors the wealthy, government and others who have borrowed. Deflation favors the working class. In a free market, economy power naturally shifts back and forth from one sector to the other. Deflation occurs naturally when the productivity of labor increases. Inflation occurs politically. When power starts to shift in the direction of the working class, the upper class can and does create inflation politically as a means of maintaining its advantage.

“During the period between 1873 and 1879, prices dropped by nearly 3% every year, yet real national product growth was around 7% during the same time period. However, despite this economic growth and the rise of real wages, historians have called this period “The Long Depression” because of the presence of deflation.” Investopedia

Prices dropped profoundly during the 1970s during a long period of economic growth. Real wages increased significantly. At this time procedures for enhancing economic activity by way of “stimulus” had not yet evolved. A degree of economic power did shift to the working class for a while.

In our modern era, the Federal Reserve has been fighting deflation since the Reagan administration.  Increases in the productivity of labor have been monumental.  Yet, real wages have stagnated. Profit margins of corporations have increased. Prices have been very stable until recently. This is no accident. The working class has been robbed of the productivity bonus it would have received had prices been allowed to fall. This has all been accomplished politically. Now it is politically expedient to create inflation as a means of shrinking the debt size of heavy borrowers.

Deflation has been defeated for 40+ years but deflationary forces are still present and have increased.  Unlike other economies where runaway inflation has taken hold, the United States has massive production capabilities which can be used. An enormous amount of demand has been in non essential goods and services. There are also plenty of substitutes for all we buy and consume. Creating ever rising prices will be an enormous task.

One of the many negatives with respect to stimulus is that resources become more and more inefficiently allocated over time. Recessions occur because businesses are not getting the profits they expect from what they are currently producing.  Recessions disappear and business finds more productive ways to use its resources.  Inflation prevents this from happening.

In economics, if we prevent what will occur naturally, what would occur naturally occurs anyway eventually.

Notice, I am not citing numbers or pointing to lines on charts. I don’t need to. Instead, I think things through and as always am focused on what causes numbers to be what they are instead of thinking the statistics just happen to fall into place the way they do.

So, I am expecting things to reverse. Inflation will give away to deflationary forces and the overall price level will fall. Lets see what happens.

We are facing a depression, not a recession. Deflation, honestly is more likely.

The Daunting Nature Of Reality PDF Version 

The harsh nature of the physical world is accepted without debate. We cannot go out side in the winter or summer without making adaptations.People work outside in the harshest cold weather. This cannot be done without wearing winter clothes. Even so, those outside during extreme cold weather, look forward to the warmth of a fireplace and can not wait to get there. It is cold outside but we alter our environment so that we are comfortable. Life on earth cannot survive in outer space or on any planet we know of.

Human beings also have an inner world where cold, heat and other environmental issues are not relevant. Our inner worlds are daunting also. I frequently mention that every child born immediately enters into an eternal power struggle, while not aware of this being the case. Life is regulated by harsh laws of dominance and subservience. Continue reading →

Was Adam Smith Crazy? PDF Version

Was Adam Smith a conspiracy theorist? It seems he was. So, I suppose that makes him crazy – right? Adam Smith is routinely deemed to be the first economist and the father of free market thought. Should we now disregard everything the man wrote or said? After all, is it not true that all allusions to conspiracy are products of the imagination and must be treated as such? Was Adam Smith just another trouble maker like all conspiracy theorists? Or, was he merely pointing out what is normal human behavior? You decide.

Continue reading →

Accepting Reality April 2022 PDF Version

The race to escape reality begins at birth. Reality is replaced with fantasy because it is too harsh to cope with. Every child is born into an eternal power structure. Our world is governed by laws of dominance and subservience. Most people live in an oasis of peace from all of the belligerence and brutality that is actually ongoing. It is easy to see the world as a peaceful place for those who have no direct involvement with it.

Most agree that power corrupts and absolute power corrupts absolutely. Today power is concentrated at the top of society more so than it ever has been in human history. So, those in charge of the world and its people are closer to having absolute power than has ever been the case before. Americans are surrendering their First Amendment rights as if those rights are not necessary and that they will be fine without them. Continue reading →

A Brand New Wonderful War PDF Version
Here are some questions I asked myself. I wonder how other Americans answer them?

I ask myself :

What do I know about the ins and outs of politics in Russia or the Ukraine?

Almost nothing, I haven’t been focused on that part of the world.

What do I know about Vladimir Putin, President of Russia? Continue reading →