Comments invited for this hypothesis

SilverSanchez

SilverSanchez

Active Member
I dont believe people are stupid,

I believe the governments know what they are doing, I believe Bernanke knows what he is doing...

Hypothesis:

As a tripple benefit, Bernanke talks about reducing bond perchases to orchestrate an artificaial 'correction' to
1.Initiate selling to maximise short term capital gains taxes (which have as of this year - doubled in the US) and
2.To cause an artificial correction to avoid a 'bubble' developing before he is ready.
3. To slow down money velocity by creating fear of deflation

If this is true - I believe its done for a global benefit of maximisng taxes for western governments, and manage 'bubbles'

Comments, thoughts?
 
Granted this would cause increasing slow downs in the economy, but I believe if Bernanke cared about the economy he wouldnt have started QE in the first place. Keynes didnt care about economies either, he cared about stealing the money from the 'wealthy'.
 
SilverSanchez said:
I dont believe people are stupid,

I believe the governments know what they are doing, I believe Bernanke knows what he is doing...

Hypothesis:

As a tripple benefit, Bernanke talks about reducing bond perchases to orchestrate an artificaial 'correction' to
1.Initiate selling to maximise short term capital gains taxes (which have as of this year - doubled in the US) and
2.To cause an artificial correction to avoid a 'bubble' developing before he is ready.
3. To slow down money velocity by creating fear of deflation

If this is true - I believe its done for a global benefit of maximisng taxes for western governments, and manage 'bubbles'

Comments, thoughts?
Click to expand...


I believe they THINK they know what they are doing, and if they do get it wrong will do what every they can do in their power to deny deny deny and maintain the status qua.
 
I don't think they are stupid, I just don't believe they have the level of control that they make out (and most people) think they have. They are flying by the seat of their pants, trying to create inflation without destroying confidence in the currency at the same time. That's why you have this switch it on/switch it off strategy.

It's kind of like they are boiling water and they have to keep it in a certain range. It gets there and they say turn it off now. Then the water starts to cool. They wait until it gets near the bottom of the range and then they say turn it back on. It gets back up. Turn it off. All the while the temperature range is getting smaller and they are getting more and more nervous because they have less room to work.

They are smart, no doubt. But it doesn't matter how smart you are if the situation is slipping out of your control.
 
So my concern is what happens when all the water evaporates, or the governments lose the ability to top the kettle up with water, or when people begin to realise that for example,

the stock market is only going to simmer around it's current levels before the kettle is taken off the heat again to allow it to cool down, so in effect you are putting your hard earned money into a market with limited potential to heat up more than current acceptable levels as dictated by the powers to be.

Wouldn't it make more sense to admit to the minions that QE is going to continue until as they have said in the past, unemployment reaches a particular range? And that QE can not and will not be tapered until such time? Or would that be simply admitting that they believe that the unemployment rate will never be returning to levels seen in the past?, and they are in fact only operating on life support?

Wouldn't the best approach be to allow the currency to reduce significantly to increase the exports of the country, to enable real job growth, yet allow for some wealth appreciation for the people from other investments that would be increasing because of the devaluing dollar, for example stock market, precious metals, housing ect to offset the devaluing of their currency?
 
what I dont get is they have a neo-classic example in Japan of how it doesnt work, yet beligerently, they cascade down the pre-greased slippery slide to oblivion.
 
hiho said:
what I dont get is they have a neo-classic example in Japan of how it doesnt work, yet beligerently, they cascade down the pre-greased slippery slide to oblivion.
Click to expand...
This is only one reason why I suspect its on purpose
 
I believe they know what they are doing. Bernanke is 100% competent, only we are not being told the honest reasons for any of the feds moves.

With the volume that's been printed almost none of its making it through to circulation. Vast majority sitting as excess reserves on the big boys balance sheets. IMO this is what QE is all about, its not stimulus, its not going to effect unemployment. This money will sit behind a couple of smoke screens and be used by the big boys to manipulate the markets.

What would you do with that kind of money? I sure as hell wouldn't be buying dips I'd be creating the highs and lows.

Could spend some time profiting, buying selling any stocks or commodities I wanted gradually building a stack. Probably a physical stack as well as a paper gold stack, then I could continue dumping paper to keep the price down while I grew the physical stack.

Who knows what the endgame is but I'm confident QE isn't just going to sit in the background for ever and when the music stops the big boys will have a lot more going on behind the scenes than the odd announcement indicates. Talk of tapering off of QE is only a game of lining up the chairs while the music is still on.
 
SilverSanchez said:
I dont believe people are stupid,

I believe the governments know what they are doing, I believe Bernanke knows what he is doing...

Hypothesis:

As a tripple benefit, Bernanke talks about reducing bond perchases to orchestrate an artificaial 'correction' to
1.Initiate selling to maximise short term capital gains taxes (which have as of this year - doubled in the US) and
2.To cause an artificial correction to avoid a 'bubble' developing before he is ready.
3. To slow down money velocity by creating fear of deflation

If this is true - I believe its done for a global benefit of maximisng taxes for western governments, and manage 'bubbles'

Comments, thoughts?
Click to expand...
As Hawkeye said. The are reactive to their immediate needs and desires. In the first instance they are trying to "save" the US banking system as that is their purpose and to hell with any other consequences. In this "saving" they are partly pre-emptive but mostly reactive and 100% political in terms of the inner working of the Boy's Club (when they think they can get away with it). Lehman's collapse was principally politics within the Boy's Club. The reporting back to Senate committees etc tends to place significant restraints on what they can do in terms of pre-planning a complex strategy so manipulation is therefore done with the short term interests in mind.

In terms of "knowing what they are doing" I think avoiding deflation is possibly their biggest concern as that is where the confluence of interests lie - saving the banking system, playing political games for Boy's Club benefit and loosening political restraints while openly filling their sacks under everyone's noses.

Beyond that their sphere of influence is far too small.

Edit: And of course, certain elements of the Government's list of interests coincide (and coincide in a strongly positive way) and this why the average citizen gets raped by the credit money economy.
 
SilverSanchez said:
I don't believe people are stupid,

I believe the governments know what they are doing, I believe Bernanke knows what he is doing...

Comments, thoughts?
Click to expand...

50% of the population is below average.
 
The Fed may be just testing the waters to gauge the market reaction. Going by the bond sell off over the last few weeks, there is no way the Fed will stop QE. The slighest hint of removing the punchbowl has pushed treasury bond yields to multi-year highs. They may keep suggesting tapering, but I'll believe it when it actually takes place.
 
SilverSanchez said:
Hypothesis:

As a tripple benefit, Bernanke talks about reducing bond perchases to orchestrate an artificaial 'correction' to
1.Initiate selling to maximise short term capital gains taxes (which have as of this year - doubled in the US)
Click to expand...

I'd buy it, except the US financial year doesn't end on June 30 like it does here. If you wanted to maximise tax revenue on capital gains, there's no need to take action until shortly before the end of the fiscal year. Furthermore, inducing an asset to lose value in the hope that people will sell is fine, but you greatly reduce the induced gain, and perhaps turn it into a loss, and thus no capital gains tax would apply.
 
sammysilver said:
SilverSanchez said:
I don't believe people are stupid,

I believe the governments know what they are doing, I believe Bernanke knows what he is doing...

Comments, thoughts?
Click to expand...

50% of the population is below average.
Click to expand...

So true! But I think that people have a belief or are biased to believe in the innate goodness and honesty of their fellow beings. Psychopaths and megalomaniacs take advantage of this by habitually lying, making unsustainable promises and rationalising their greed, dishonesty and treachery as the pragmatic and necessary choices of leadership.

As for the delusions of the inmates in charge of the asylum, I reckon this is a good metaphor for their predicament.

end-badly.png
 
Midnight Man said:
SilverSanchez said:
Hypothesis:

As a tripple benefit, Bernanke talks about reducing bond perchases to orchestrate an artificaial 'correction' to
1.Initiate selling to maximise short term capital gains taxes (which have as of this year - doubled in the US)
Click to expand...

I'd buy it, except the US financial year doesn't end on June 30 like it does here. If you wanted to maximise tax revenue on capital gains, there's no need to take action until shortly before the end of the fiscal year. Furthermore, inducing an asset to lose value in the hope that people will sell is fine, but you greatly reduce the induced gain, and perhaps turn it into a loss, and thus no capital gains tax would apply.
Click to expand...


you want the same person to buy (either short or long) and then close that possition - and you want movement in between. Its a tax event if you close a possition but its not matertial if the capital gain is negligent. You want to orchestrate a broad range to maximise tax yeild from long AND short possitions
 
SilverSanchez said:
you want the same person to buy (either short or long) and then close that possition - and you want movement in between. Its a tax event if you close a possition but its not matertial if the capital gain is negligent. You want to orchestrate a broad range to maximise tax yeild from long AND short possitions
Click to expand...

Right, but individual reporting for tax (as far as I know) is April 15... near 10 months away. Bit early for this type of shenanigans, perhaps?
 
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