Ultimate Fed Conspiracy Theory

[Celebration]

There is this guy predicting stock market changes based on the open market operations of the Federal Reserve Board--

http://www.interventionalanalysis.com/

He is one of the GATA guys. His specialty is market interventions and he uses statistics to figure it out.

One thing I really do like about it is that he at least looks at the Federal Reserve Board open market operations. Why others ignore these I have no idea.

Okay, as far as I can tell, here is his theory. (Keep in mind that at least part of it would probably go into a "dungeon" economy forum if there was one. Since there isn't, I'll just go ahead as a FYI.)

The Fed can increase the money supply using repos to lend money to the banks for a period of time. In the meantime, the banks get to use the money. So, the Fed has actually been keeping the money supply small, according to Bolser, using open market operations, while at the same time appearing to have a loose money supply by decreasing the fed funds rate.

Why? Well, according to Bolser, it is because we would have hyperinflation without this policy. They are trying to put us into a deep recession so that hyperinflation doesn't occur.

I haven't looked at the figures. I am only reporting his reasoning and what he is telling subscribers (no, I am not one).

Now, I could buy the above, actually. But he goes much further. He claims that on the days when there is a big bulge in the number of repo agreements, that the banks use the money to do the Fed's bidding. The Fed's bidding is to knock down the stock market by intervening in futures contracts, thereby inducing the recession that they want. That's right--according to him there is a conspiracy by the Fed and some of its member banks to put us into a deep recession. Anyway, Belser follows this daily and when there is a huge increase in the repo amounts, he knows the stock market will go down shortly, in the next day or two. According to him, the Fed wants a managed decline of the Dow to about 8,000.

BTW, I just happened to listen to Coast to Coast the other night, and this bit was told to us by Jerome Corsi. He is not exactly a good guy, but he based this bit on an interview of Bolser.

I hope I got this conspiracy thing right. I know it went something like the above.

Are there any good graphs re: Fed's open market operations on the internet?

[Demeter]

1. Oh What a Tangled Web We Weave

They have to be out of their minds. There's no other excuse or reason for such a plan. And it's doomed to failure anyway. If not prosecution.

[sam sarrha]

2. the reins were dropped a long time ago.. no one is going to prosecute anyone..

[moodforaday]

3. Thanks for posting this. And

if anyone wonders what a "repo" is, like I did, here's the deal:

Repurchase agreement - Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Repo_%28derivative%29

[nightrider767]

4. Yes but,,,

what interest does the Fed have in lowering the DOW to 8000?

Also the site that you linked to uses Elliot Waves for technical analysis. I've found that to be complete hogwash.

Not knocking your post, as you do bring up many excellent points.

Thanks.

[Celebration]

5. not saying I buy it!!

He is saying that the Fed believes that a lower Dow will cause a bad recession. And the Fed (he says) believes we need a bad recession in order to wring out the excesses of the economy. These excesses, if unchecked, would lead to hyperinflation. That is the reasoning. He says the Fed is always here to save the bond market.

It would be fun to track this somehow, but I don't see a real easy way to get the data. It is given out, but not in a form that is easy to use.

[nightrider767]

6. Interesting thoughts...

but it my view it follows the failed logic that the DOW is somehow tied to the economy, like they tell you on CNBC. The DOW is actually tied to the psychology of the economy, or the mood. If a company posts unexpected profits, that doesn't mean the price will go up. There is no connection. It's all psychological.

We might as well be dealing in Tulips, because for all a stock is worth, in the end it's only paper.

But I do agree with you, there is an organized manipulation in the background. My wife just got finished reading a book about the Bildeburghs. I told her hey, something is going on, but the people who are pulling the strings will not be known in print. These guys operate behind closed doors, on golf courses and strip clubs, shaping things to their own advantage.

It's not a conspiracy theory, just capitalism run amok. Unbridled human nature.

When the recession comes, and look, howdy-doodey, it's actually here, it's here because people have slowed their spending. The real estate markets have killed the "wealth affect" and people realize that their optimism of things getting better, may not be true. When we cut back on spending, all hell breaks loose.

But I'll be tracking this stuff with you, as you've said, it's very interesting.

Thanks.

[Celebration]

7. Bilderberg June 2006

http://www.informationliberation.com/?id=12432

Bilderberg expects interest rates to rise and many Americans to lose their homes in the months ahead. Meanwhile, they hope they can pressure President Bush to refrain from an all-out invasion of Iran while maintaining oil prices at their current record-high levels of about $70 a barrel.

Timothy Geithner, president of the Federal Reserve Bank of New York, predicted rising interest rates and difficulties for families that have obtained adjustable rate mortgages, or “variable” interest rates. Many are likely to lose their homes as rising home mortgage rates add hundreds of dollars to their monthly payments, he said. While most listened solemnly and some expressed concern, one was heard to say, “stupid Americans deserve their fate.”

Many Americans, especially young families, have been buying expensive homes at low but “variable” interest rates. Others have been paying just the interest owed on their homes and not the principal. They are the most vulnerable, Geithner said. Some have paid little or nothing down. Some institutions “lend” buyers the down payment.

When home construction peaks and prices start downward, many will find they owe more on their home than it is worth in the marketplace. They will also find their mortgage—even “interest-only” payments—are unaffordable. The banks will get the homes back and sell them again.

Again, the term “stupid Americans” was heard among clucks of sympathy or silent indifference. According to one source, no concern was expressed by Allan Hubbard, assistant to President Bush for economic policy.

[westerebus]

8. Bonds

And just who is holding Bonds? Mr. Dick himself. Go figure.

[nightrider767]

9. Are Americans really stupid?

It's easy to say yes, but not entirely fair. Sort of like the mushroom analogy. Ask a mushroom about the beaches in Bali, and he'll only say, "how would I know, I spent my life in the dark being fed shit". And so it is with Americans.

Another problem with Americans is that we are so proud and have so much optimism. We think our society is not only the greatest on the planet, but that our economy will always out pace the other countries providing an ever increasing standard of living. Not so.

But I can tell you one thing, the boyz at Mercedes are sweating bullets right now watching their luxury car line sale tank.

Maybe American aren't that dumb after all.