Anticipating The Yikes Moment

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When, as is the case today, the value of assets have been generated by a means other than price competition, the the markets of these assets are likely at some point to suddenly collapse.  A yikes moment occurs when multitudes of asset owners suddenly awaken to the fact that their investments are going down no matter what. This discovery is likely to occur all at once.

Recently the entire  oil market experienced a yikes moment. Suddenly oil prices fell off a cliff. The current delivery month went negative because there was such a huge glut of oil not being purchased that it was cheaper to pay someone else to take the oil inventory than it would have cost to store it.

For many decades,  the oil cartel managed both production and price with respect to petroleum. The idea of a cartel has a permanent sound to it, but any cartel is weaker than it seems. Each cartel member is better off under pricing its product, Each member cheats as much as possible. Given enough time, the cartel falls apart.

The oil market collapsed because, oil prices were for years determined outside of the free market system. Market forces never disappear. Market forces may go into hibernation but they always reappear.  Market forces suddenly reappeared and it all fell apart.

The same thing will happen in the U.S. stock market, world stock market, real estate and credit markets. The practice of rigging stock prices began in the Reagan administration.

The practice of stock market rigging has grown with every presidential administration since. Today the stock averages are so orchestrated, that ordinary investors no longer make much difference where stock prices are concerned.

Notice that stocks still doing well fall into certain categories.   All strong stocks are in industries that have enormous political power.  They are parasites. All benefit from a population that is homogenized, believes the same things, is compliant and trusts authority.

The FANG socks, Facebook, Amazon, Google and others completely survive by managing the opinions and beliefs of their users. Companies like this manage Americans in the same way trail bosses manage herds of cattle. This is highly profitable and their users are good with it or don’t care.

The pharmaceutical industry prospers by keeping inexpensive cures off the public’s radar and off the market. The root cause of censorship of reports on less expensive cures is the power the pharmaceutical industry has and uses to make others with power support their efforts.

The healthcare industry, has managed to successfully lobby for the passage of the Affordable Care Act. The result has generated a system of healthcare that is parallel the the system my uncle, who was a cattle rancher, used to provide healthcare to his animals. He had a way of corralling cattle, and then running them one at a time through a shoot so that he could vaccinate each cow in less than a minute. The Affordable Care Act accomplishes the same thing and the same herding techniques my uncle used with his cattle. Shortly after its passage lifespans in the United States began falling.

Up to this point, managing the stock market has benefited all who were long term holders of stocks as well as less politically powerful corporations. Any voices which insisted that equities be allowed to find their own price levels have had few if any stock holdings.

Most stocks are still doing very poorly. Even after the recent powerful rally, only 27% of stocks are above their 200 day moving averages. Like members of the oil cartel, others who currently benefit from stock  market manipulation will go into the every man for himself and actually turn against the parasites which have enriched them up to the present.

All cartels are temporary. They destroy their host’s ability to pay them for what they are selling. The first to be destroyed are the poor and then the middle class. The destruction will climb the income hierarchy  until the top is released. Then the parasites will collapse and fall right on top of everyone who is already suffering.

There will be a yikes moment and that will be when people around the world suddenly and involuntarily get in touch with reality. I can’t think of a way to predict a time frame of this to occur but it will.

The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

 

 

 

 

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About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
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