Rigging the Markets For Collapse

Steve Lendman has a good post on the global markets and the speculation on how they might be further manipulated. Nobody would win under the scenarios he’s described, but it’s a worthy read.

Gold at a “low” of $5300 an ounce would also mean that coffee, beans, rice and milk (all commodities and consumables) would be in the stratosphere. Think $89 for a pound of beans. Or $90 for a gallon of milk. There are no winners here.

And he also has this, which fits right in to what I have claimed, the markets are rigged.

Michel Chossudovsky, Ellen Brown and others explain what’s really going on. It’s not pretty or what Wall Street wants investors to know. That markets are heavily manipulated. Speculation drives them up and down, and very visible (insider) hands profit hugely in either direction.

Chossodovsky: “With foreknowledge and inside information, a collapse in market values constitutes a lucrative and money-spinning opportunity, for a select category of powerful speculators who have the ability to manipulate the market in the appropriate direction at the appropriate price” – and he explains the various ways how.

Brown on the “Plunge Protection Team (PPT): it’s “the group set up under President Reagan to maintain market ‘stability (profitable instability also) by manipulating markets behind the scenes.”

In other words, financial markets are rigged. “Free” ones don’t exist except in the mind’s eye of the innocent. They represent no collective wisdom other than the speculators who manipulate it for profit.

“Same Old, Same Old” is the business as usual model we’ve all come to know and loathe so well.

The newly announced plan is more old than new and only to keep under water owners from deserting their properties and renting. The idea is for lower rates, extended loan terms, lower payments, and adding unpaid balances to principal. It’s called negative amortization – when monthly payments are less than the full interest amount due. The interest accrues and principal balances increase, only putting off an eventual day of reckoning for a later time when prices of homes will be lower and owners even less able to afford them.

In others words, the solution is worse than the problem. It will sink owners more under water than at present, delay their defaulting for a later time, turn owners into levered renters, drive them deeper into debt, ensure continued foreclosures for many years to come, and end the dream of home ownership for millions. It will also discourage millions more from wanting one.

I’ve been giving a lot of thought to how this is going to wind up affecting me. You should be thinking on these things too, and I hope you are.

But consider how over-indebted individuals may react if they’re smart. Why pay anything when it’s simpler to default and walk away. For those strapped enough, it’s what growing numbers are choosing and the reason lenders like JP Morgan Chase, Citigroup, and Bank of America (already reeling from bad mortgage debt) are concerned enough to seek relief.

Instead, they should be held accountable for their fraud. For destroying savings, pensions, and for growing millions their homes and futures. For charging usurious interest and late charges on credit card balances. For gaming the system for decades but now out of their food source. Instead of help, have them give back and make it on their own, or step aside, be nationalized, and turn them into a public utility, on a level playing field, to serve the greater good for everyone.

Their due reward for what Paul Craig Roberts calls “unregulated banksters and Wall Street criminals, greedy CEOs, and a no-think economics profession (for having) destroyed America’s economy,” and now wanting to be saved from their own transgressions. Rebalance the tax code instead, make it progressive, and soak the rich, not the poor. It was the original idea in the first place at a time low income earners paid nothing. Today they’re overburdened, overtaxed, out of work, and out of hope during the most serious disruption in our history.

They’re not offered part of the latest bank handout that’s little more than naked theft on top of all of it earlier.

Basically, everyone is talking Socialism whether they realize it or not. Nationalization of assets, redistribution of wealth, forcing the taxpayer to support the fraudulent and / or defaulting loans to their neighbors and on and on.

But it is all the things I’ve expected to happen: nobody will be forgiven their debts, assets (and capital) will be nationalized, the government will step in and take control (fascism) and eventually, this will even lead to work camps. Also bread lines and tax / debt relief “centers” for the indebted and homeless. But it will never be like it was for the serfs, those days are now over.

Kunstler has a great rant you should also read: In The Reality Lounge.  He’s in fine form again.

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5 thoughts on “Rigging the Markets For Collapse

  • November 18, 2008 at 4:43 am
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    Outstanding post. Big money is manipulating the market to extract whatever is left from naive investors. Our “leaders” shroud us in the myth du jour and continue the march toward neofeudalism. The America of our parents is dead, replaced by new robber barons in a more uncertain context.

    If hope is the longing for return to the old order, it only creates weakness, and forestalls adaptation. This is difficult ground, but make no mistake, the collapse is here in bold colors. It is on us to create our own stability, if it is even possible. Time to get busy.

    MD

  • November 18, 2008 at 6:40 am
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    It’s really hard to wrap your head around this train bearing down on those of us tied to the tracks. I wonder just how far down in the swamp the blind Americans will have to go before they wake up? I honestly don’t think that most of them will. It’s just those of us that have been able to stare at the blazing sun for years that are likely to have some hope of survival. I’m just glad that I live in the mountains. I wouldn’t want to be in a city about now.

  • November 18, 2008 at 8:20 am
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    Exactly the point made here: More from the Front Lines of the Financial Crisis

    Strains in the US Treasury market are already evident in spite of their historically low yields. Recent auctions have had poor bid-to-cover ratios and long “tails” indicate weak demand. Secondary market delivery failures are also at record levels. Another sign of poor liquidity. If the worst of all possible worlds happens – a US debt default – the consequences will be “cataclysmic for the financial economy.” The entire system will be bankrupt.

    Where to hide if it happens? Amery suggests a few safe havens. The “ultimate” one being in precious metals. Think gold. Understand also that the $725/ounce October 31 spot price reflects market manipulation (over the short term) to drive it down from its March 2008 high above $1000. As one analyst puts it: I’ll “give you three good reasons why gold is (underperforming). First: manipulation. Second: rampant manipulation. Third: incessant, nonstop, unabated, fiendish manipulation.”

  • November 18, 2008 at 10:19 am
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    And what would anyone reasonably expect in the future? First: manipulation. Second: rampant manipulation. Third: incessant, nonstop, unabated, fiendish manipulation.

    Since the price of gold can be manipulated so easily, you’d think these “signs” would be recognized for what they are.

  • November 19, 2008 at 7:02 am
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    This is why I got out of precious metals months ago. I woke the fk up and put my money into something tangible.

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