Gaming The Fed

Criminals Posing as Economists

Criminals Posing as Economists

 

 

I can say with complete authority that there is not one real economist on the Federal Reserve Open Market Committee. How do I know? I am a real economist and I know political hacks when I see them. The Federal Open Market Committee consists of hired guns carrying out the political agendas of others who helped them get appointed and confirmed. Having a degree does not make a person an economist. A degree is no indication of competence. Don’t get me wrong, these folks are not morons. They are some of the finest statisticians, accountants, and mathematicians in the world. They are so good that they can fool just about anybody by talking over their heads and dazzling them with terms only they understand. I am not impressed, partly because I am not bad at math myself but more so because I understand the limitations of mathematics and statistical models.

For an engineer building a bridge math is an indispensable tool. For a social scientist, math is good only for describing what has happened up to the current time frame. Economics, mathematical models have no predictive value. The multitude of suckers who comprise the American population believe every word that comes out of their mouths. When an institution like the Federal Reserve makes a decision, it changes all of the incentives that cause men, women and children to do what they do. The model therefore becomes immediately useless.

The models are useful to open market members because they allow them to cite reasons for what they do. In 2008 economists earned a lot of money convincing fools they could save the world from an economic disaster. What they have done is prevent the economy from ever recovering. Quantitative easing has never been anything other than the carrying out of a wealth transferring political agenda. That goal has been accomplished and now the focus has changed to preserving the wealth and power of the financial elitists who determine their agenda.

The job of the Federal Reserve is to increase the wealth of all who help the members get nominated and hold on to their jobs.

Right now the primary job of the Federal Reserve is to push the stock market higher for the benefit of all who have political authority over them.

The algorithms they use are complex but what the algorithms accomplish are simple. Anyone who has traded for a long time can notice prices being supported, in much the way stock prices have always been supported with respect to new offerings. The firm handling the offering has legal authority to manipulate the offering price steady for a certain time period. The Fed is not limited by the law, so deals can be made to prevent stocks from falling for many days running. Each day a small number of stocks are goosed to serve as confidence builders. Every effort is made to make it appear as if the market is about to fall so as to suck in short sellers who are subsequently squeezed out of their positions. This is all government business. Anyone can notice on days when there is news that would normally cause a shake out, central banks buy with both hands and halt any sell off early on.

The unsuspecting investing public is happy as larks because they are watching their IRAs rocket in value. Only a few will ever get their money out at a profit. Why? Only a handful can sell at the top and a few more will be able to sell at a profit at all. This is where math actually is useful. It is mathematically impossible for everyone to sell an investment at a profit when it is severely is severely overpriced. Folks will be shocked at how fast value comes out of their holdings.

The best thing to do is sell right now. There is now way for the economy to grow at all now, much less at a pace fast enough to justify artificially elevated stock prices.00_logo_1

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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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Jean Taylor
Admin
7 years ago

This reminds me of a statement Yellen made in some speech about 6-8 weeks ago: She stated that cash is not a “convenient store of value”. Seems to me that pretty well defines the universe as Janet and the rest of the Fed perceive it to be. I’m not sure just what would serve as a “conveneint store of value” for the staff at McDonald’s, other than cash or an equivalent. Oh wait – now I remember Yellen’s advice to the poor. They should set about accumulating assets to lift themselves out of poverty. That’s the ticket – who needs… Read more »