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Federal Reserve Money Printing Is The Real Reason Why The Stock Market Is Soaring

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Federal Reserve Money Printing Is The Real Reason Why The Stock Market Is SoaringYou can thank the reckless money printing that the Federal Reserve has been doing for the incredible bull market that we have seen in recent months.  When the Federal Reserve does more “quantitative easing”, it is the financial markets that benefit the most.  The Dow and the S&P 500 have both hit levels not seen since 2007 this month, and many analysts are projecting that 2013 will be a banner year for stocks.  But is a rising stock market really a sign that the overall economy is rapidly improving as many are suggesting?  Of course not.  Just because the Federal Reserve has inflated another false stock market bubble with a bunch of funny money does not mean that the U.S. economy is in great shape.  In fact, the truth is that things just keep getting worse for average Americans.  The percentage of working age Americans with a job has fallen from 60.6% to 58.6% while Barack Obama has been president, 40 percent of all American workers are making $20,000 a year or less, median household income has declined for four years in a row, and poverty in the United States is absolutely exploding.  So quantitative easing has definitely not made things better for the middle class.  But all of the money printing that the Fed has been doing has worked out wonderfully for Wall Street.  Profits are soaring at Goldman Sachs and luxury estates in the Hamptons are selling briskly.  Unfortunately, this is how things work in America these days.  Our “leaders” seem far more concerned with the welfare of Wall Street than they do about the welfare of the American people.  When things get rocky, their first priority always seems to be to do whatever it takes to pump up the financial markets.

When QE3 was announced, it was heralded as the grand solution to all of our economic problems.  But the truth is that those running things knew exactly what it would do.  Quantitative easing always pumps up the financial markets, and that overwhelmingly benefits those that are wealthy.  In fact, a while back a CNBC article discussed a very interesting study from the Bank of England which showed a clear correlation between quantitative easing and rising stock prices…

It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.

Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.

Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that  “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”

So should we be surprised that stocks are now the highest that they have been in more than 5 years?

Of course not.

And who benefits from this?

The wealthy do.  In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.

Unfortunately, all of this reckless money printing has a very negative impact on all the rest of us.  When the Fed floods the financial system with money, that causes inflation.  That means that the cost of living has gone up even though your paycheck may not have.

If you go to the supermarket frequently, you know exactly what I am talking about.  The new “sale prices” are what the old “regular prices” used to be.  They keep shrinking many of the package sizes in order to try to hide the inflation, but I don’t think many people are fooled.  Our food dollars are not stretching nearly as far as they used to, and we can blame the Federal Reserve for that.

For much more on rising prices in America, please see this article: “Somebody Should Start The ‘Stuff Costs Too Much’ Party“.

Sadly, this is what the Federal Reserve does.  The system was designed to create inflation.  Before the Federal Reserve came into existence, the United States never had an ongoing problem with inflation.  But since the Fed was created, the United States has endured constant inflation.  In fact, we have come to accept it as “normal”.  Just check out the amazing chart in the video posted below

The chart in that video kind of reminds me of a chart that I shared in a previous article

Hyperinflation Weimar Republic

Not that I expect the United States to enter a period of hyperinflation in the near future.

Actually, despite all of the reckless money printing that the Fed has been doing, I expect that at some point we are going to see another wave of panic hit the financial markets like we saw back in 2008.  The false stock market bubble will burst, major banks will fail and the financial system will implode.  It could unfold something like this…

1 – A derivatives panic hits the “too big to fail” banks.

2 – Financial markets all over the globe crash.

3 – The credit markets freeze up.

4 – Economic activity in the United States starts to grind to a halt.

5 – Unemployment rises above 20 percent and mortgage defaults soar to unprecedented levels.

6 – Tax revenues fall dramatically and austerity measures are implemented by the federal government, state governments and local governments.

7 – The rest of the globe rapidly loses confidence in the U.S. financial system and begins to dump U.S. debt and U.S. dollars.

I write about derivatives a lot, because they are one of the greatest threats that the global financial system is facing.  In fact, right now a derivatives scandal is threatening to take down the oldest bank in the world

Banca Monte dei Paschi di Siena, the world’s oldest bank, was making loans when Michelangelo and Leonardo da Vinci were young men and before Columbus sailed to the New World. The bank survived the Italian War, which saw Siena’s surrender to Spain in 1555, the Napoleonic campaign, the Second World War and assorted bouts of plague and poverty.

But MPS may not survive the twin threats of a gruesomely expensive takeover gone bad and a derivatives scandal that may result in legal action against the bank’s former executives. After five centuries of independence, MPS may have to be nationalized as its losses soar and its value sinks.

So when you hear the word “derivatives” in the news, pay close attention.  The bankers have turned our financial system into a giant casino, and at some point the entire house of cards is going to come crashing down.

In response to the coming financial crisis, I believe that our “leaders” will eventually resort to money printing unlike anything we have ever seen before in a desperate attempt to resuscitate the system.  When that happens, I believe that we will see the kind of rampant inflation that so many people have been warning about.

So what do you think about all of this?

Do you believe that Federal Reserve money printing is the real reason why the stock market is soaring?

Please feel free to post a comment with your thoughts below…

How Much Money Will They Print?

  • Tim

    I’ve come to the conclusion that nobody, regardless of how experienced or successful they are, knows what will happen next or when. For example, Jim Sinclair, CEO of a gold mining company and a VERY wealthy man, recently stated that he expects hyperinflation to start this year. On the other hand, Eric Sprott, CEO of Sprott Asset Management and also a VERY wealthy man, recently wrote that it may be many years before we see high inflation.

    So who’s right? They can’t both be right.

    I no longer put much stock in these types of predictions. We know the end result, but it could be a while before we get there.

    • Mondobeyondo

      I’d place my bets on hyperinflation. Not this year, but maybe by 2015 or 2016. Remember, my crystal ball is cracked.

    • GSOB

      They’d be both right about inflation, it’s coming.

      • sharonsj

        Inflation is already here and has been here since 2008. Sugar up 40%, pet food up 40-100%, packaging reduced by 1/4 to 1/3, utilities skyrocketing, etc. And they wonder why retail sales are flat–it’s because nobody has any money left.

    • The guy who owns the gold mine will turn a tidy profit if he convinces others that hyperinflation is on the horizon. He’s somewhat biased.

      • Syrin

        And also correct. Follow the players. All central banks are stockpiling gold, Germany and Switzerland are repatriating their gold, China, the number one producer of gold is IMPORTING MORE gold !! They KNOW what’s coming.

        • Ralfine

          China has useless USD. And it is easier to store gold than oil.

          Personally I wouldn’t buy gold anymore. I have enough to put into amalgam for crowns and fillings if needed.

          Gold is needed when it gets really really really really bad, and no deeds and ownership papers of real estate and gold mines have any meaning any more.

          But then you still need skills to keep that gold and trade favourably.

          The question remains – what will happen to coins? Will the cent cost dollars or millions of paper dollars in future?

          Time to collect lose change?

    • John Wheeler

      Actually, in a way they can both be right… one is talking about TANGIBLE assets, the other about PAPER ones. Gold prices could double each year for the next three or four years while stocks stay flat. I mean, sure, 100% APR inflation for 4 years isn’t technically hyperinflation, but it is still very high.

    • Syrin

      You are missing the point. They are BOTH right, the only difference is the timing and severity.

  • Robert

    Without a doubt, QE is pumping up the values of stocks and real estate. That has been the Fed’s plan all along. Politicians are short sighted like most Americans and don’t understand that a larger correction needs to take place to eliminate all the malinvestment. Yes, we will pay a higher price later and I hope most of the readers of this forum have taken steps to mitigate the coming recession.

    • Cateye

      What steps are you taking Robert? I have taken some steps and continue to do so, but am interested in what others are doing. Frankly, I am terrified at what I see coming at us like a freight train.

      • Syrin

        Get OUT of the US dollar, and get out of the market while it still has value. The big players are buying gold, silver and real estate. You do not want your wealth in the currency bubble, the bond bubble or the market bubble. Many have stated real estate is over priced and still has correction, but that varies WIDELY region to region as some areas have corrected.

        When you buy gold, buy actual physical gold that you could hold in your hand and beat GARY to death with when he comes demanding you give him your stuff. If you buy gold ETF’s, you’ve bought into another bubble and fiat currency. Good luck.

        I bought a damn gold MINE I am so certain of what is coming.

        • Ralfine

          That means, you got a PAPER that states that you are one of the 10 billion owners of the newly discovered gold mine on the moon?

        • Bad_Mr_Frosty

          Like I’m going to use my precious gold to protect myself from the Garys. Lead is much cheaper…

          • energizedmortal

            most won’t make it anyway. can’t eat gold or lead and if you grow your own stuff you will run out of bullets during the stampede of garys

          • H. A. Reed

            What the hell is a Gary?

        • KaratbarBullion

          Do you have the ability to mine, extract and refine the gold yourself? Buying Physical Gold is definitely the solution, but you need to make sure your Gold is in smaller, and more importantly, that it is denominated in transactions friendly weights. Gold has no choice to revalue. If , or rather when a Zimbabwe style collapse occurs with the USD, do you want to be giving up a full ounce coin for a bag of groceries, or tank of fuel, when you could acquire those things with a mere gram, or even fraction thereof?

    • Mondobeyondo

      Robert, you have seen the light. And yes, it is an oncoming freight train. Believe me, when it hits you, it won’t feel like the Chattanooga Choo Choo.

      • Syrin

        Google the following for a glimpse of our future. Wiemar republic. Zimbabwe.

        • Mondobeyondo

          Yup. Exactly where we’re headed.

  • markthetruth

    Wall Street movies best line…

    Money isn’t lost or made. It’s simply transferred from one perception to another.

    Greed — for lack of a better word — is good. Greed is right.
    Greed works. Greed clarifies, cuts through, and captures the
    essence of the evolutionary spirit. Greed, in all of its forms
    — greed for life, for money, for love, knowledge — has marked the upward surge of mankind

    The truth is there will be only two classes of people in the world.

    The Leaders (Super Intelligent that can talk to a human like computers.)


    The Followers (just can’t cut it. and will be the GO FOR.)

    the end…

    • Syrin

      Wealth can be destroyed. We’ve seen it many times in many nations.

      • markthetruth

        Depend how your looking at it ???

        As for APPLE.

        Wealth was Lost when Steve Jobs died

        the brain engine/inventor and the key can never be replaced…

        the end…

        • Syrin

          Entire nation’s GDP shrink. The individual players are irrelevant,

          • markthetruth

            How can you say that when it is the president’s of the united states that are the ones who’s economic decisions are what created this mess.

            the end…

  • Mondobeyondo

    Life is good for those Americans who have invested in the stock market. Unfortunately, that leaves out about 97% or 98% of the rest of us (not counting 401(k)s and mutual funds from your employment, etc.).

    What’s making the stock market skyrocket?
    Confidence, and confidence alone.
    Nothing else. No gold (we went off the gold standard on August 15th, 1971). No silver. No cotton, corn, copper, or anything else. Just blind faith.

    When people start losing confidence, watch the market plummet. It happened in the autumn of 2008. It can (and will) happen again.

    • Hambone

      I have some (not a lot of) money in the market, indirectly. In mutual funds, 401k’s, etc. I recently dumped a bunch of it into money markets because I don’t believe what’s happening. I may miss out on some big gains, but I’m sleeping well at night.

      I really do think the rise in the market is unreasonable. I also think it will take a single event to cause it to spiral downward, and I don’t know when it will stop.

      Liquidating a big portion of your market holdings may mean missing out on some of these projected huge gains, but it also may mean preserving your savings if the market goes down the toilet.

      • vv0310

        Good move. That’s what I did in ’07 (left my old job, started a small business). Lost about $100.00. Converted the 401 to gold IRA in ’09 and it doubled in one year.

        • I’d steer clear of those “Gold Backed” IRA’s, If you are going to rely on gold, rely instead on the physical commodity and not a piece of paper that is nothing more than a “promissary note”
          In 2012 when the almost overnight decline of gold value struck, there was a VERY good reason behind it. Investors at that time literally flooded the commodities markets with the “paper” gold…Thus driving the prices intentionally down. We are now in somewhat of a “holding pattern” waiting for the precise moment when it becomed HUGELY profitable to buy the physical gold.
          Savvy investors will at some point,(likely soon), begin buying MASSIVE ammounts of the physical gold which will inevitably cause a “run” on the gold market…..When this hapens,(and I state clearly the “when” and not the “if”.) Gold,(and silver/platinum), prices will break all records. These investors arent going to be buying gold by the ounce or even the pound….They will be buying literally by the TONs!
          This will be the trigger event to a total economic and monitary collapse….Just sayin…

      • RICHARD

        You know what they say hambone, Pigs get butchered and Hogs get slaughtered. I hope you have some cash stashed because there is a good chance the banks could have a holiday or make your money disappear.

  • Mondobeyondo

    The infamous words of economist Roger Babson, in the summer of 1929:

    “A crash is coming, and it may be terrific”.
    He was right.

    Do I think a crash is coming?


    • I’m not worried

      Larry Burkett preached that in the 60’s, and 45 years later people are still preaching it. Too many people are over reacting to something that may, or may not happen for a long time…

  • pingshingwingwong

    We could wake up to a different world tomorrow.

  • BeenThere

    Printing money isn’t the problem. They did that to end the last depression. The difference is that then the money went into the productive sector (armements during the war and consummer goods after). Now the money just goes into the non productive and then is when hyperinflation occurs

  • 2Gary2

    South Koreans enjoy Internet access today at speeds that run well over 100 times faster what most Americans can get — at half the monthly cost
    Americans typically pay. What do we have that South Koreans don’t? We
    have high-tech corporate execs routinely pulling in mega millions for
    delivering second-rate technology. The latest sign of the immense
    fortunes our high-tech titans are raking in: News reports last week
    revealed the late November sale of a Silicon Valley home for $117.5 million, the second-highest price ever paid for a U.S. residence.

    • Syrin

      Yes, the true measure of a nation’s success is their ping rate.

      This is self explanatory, “revealed a study discovered that for every dollar corporations spent on lobbying in 2004, they received $220 in return. This is a 22,000% return on investment.” So it pays to hire lobbyists. How about the DC officials? Well, they are living like French royalty circa 1789. “seven of the ten wealthiest counties in the U.S. are counties around the DC region, and that the capital city is increasingly overrun with Maserati, Ferrari, and Lamborghini dealerships.” This was true in the Silicon Valley too, but that was from wealth CREATION, this is caused by wealth EXTRACTION. That is money that WE should have in our pockets to spend as we see fit. Japan, the most indebted nation on the planet MIGHT be learning as they decided to follow Ben Franklin’s advice when they announced, “Welfare payments to be slashed ¥74 billion to root out the comfortably poor”. Our nation is over run with comfortably poor people. It’s the new American dream. A pot of welfare checks at the end of every rainbow.

      • 2Gary2

        I was simply illustrating one of the many ways wealth and income inequality are hurting us.

    • Hammerstrike

      Obviously, some folks doesn´t like knowing that.

  • 2Gary2

    Some suggestions we may be all able to agree on on taxing the rich:

    Close the carried interest loophole

    Cap the deductibility of executive pay

    Adopt a financial transaction tax

    Close offshore tax haven loopholes

    • Syrin

      Hey Gary, a report issued just today tells us that the expected the gains from taxing the rich, the only thing you know and live for, was spent on just the Sandy relief program. You cannot tax yourself to recovery or prosperity. I have shown you the study of 37 nations over 21 years, and yet, like a sea slug, you are incapable of learning.

      Buy some Dora the Explorer books. They are at your level and will keep you entertained when you are starving to death or before you are killed while trying to take your “fair share” of someone else’s stuff.

      • Rodster

        LOL !

        And in other news France’s finance minister let the cat out of the bag and said today that France is TOTALLY bankrupt.

        Hey Gary2 instead of being such a pissed off loser, why don’t you move to ND where you can 100K+ working in the oil recovery field. Nah, that’s actual work. It’s much easier to b*tch and take someone else’s money.

      • sharonsj

        The fiscal cliff bill included $70 billion in giveaways to Goldman Sachs, Nascar, the Disney Corp, etc. I don’t hear you screaming about that. You seem incapable of learning that corporations are the ones not paying their fair share.

      • 2Gary2

        We are not really taxing the rich that is why. Still have the carried interest loophole, the rich only are now paying 39% and it should be 70%. So thanks for making my case about us not taxing the rich as much as we should be.


    i keep my eye on Europe and Asia at night, especially Japan. I believe when it hits every thing will happen within a few days. When i see it collapsing i will make my last ride to the supermarkets to make my last stock up of food. After that what food is left no one will have enough money to buy it.

    • Syrin

      Dude, keep in mind supermarkets carry a THREE DAYS supply of food at any one time. You need to start stockpiling NOW, because when the collapse comes, it won’t be a week’s worth of turbulence. We’re talking months to years

      • RICHARD

        Syrin, I have been buying freeze dried food for years. I also am a farmer and raise chickens and rabbits. I don’t have a huge piece of land but i have enough to keep my family and a few neighbors going for quite a while. I have seen this coming for years.

        • Syrin

          Good. Well done.

        • I’m not worried

          The problem with having abundance of anything while others are going hungry you stand the chance of being overcome by a mob of hungry people wanting your food…As for buying gold and silver that to, is a farce…..We might as well face the facts, if the world economy crashes we’re all in serious trouble….The peace of God in our hearts during times like that is so very precious. Accept Jesus today and be saved…

          • noone

            Jesus was killed over 2000 years ago and couldn’t even save himself. Accept G- d and truely be saved.

          • Ransomed

            there were over 500 witnesses to Jesus resurrection. He lives at the right hand of God and no one comes to God but through Jesus. If you read the Holy book you would read this but if you get all your knowledge from CNN or NPR then your faith is in your stomach or what ever makes you feel good.
            Accept GOD?? God says He won’t accept anyone without Jesus whom He raised from the dead.

    • Mondobeyondo

      When it hits, most people won’t know what hit them.

  • El Pollo de Oro

    Currency debasement is one of the things that will push The Banana Republic of America (formerly Los Estados Unidos) even deeper into Third World squalor. Millions of formerly middle class Americans have been plunged into poverty in the depression of 2008-2013, and millions more will join them in poverty when the BRA dollar weakens even more.

    Here’s what the experts have to say about the state of the BRA dollar. We would do well to pay attention to their warnings:

    “The U.S. currency will probably be devalued the
    most.”—Max Keiser

    “Currency debasement, by definition, is
    hyperinflation—and hyperinflation is now in the cards. Peter Schiff agrees.”—Max Keiser

    “Our digital currency isn’t even worth the paper it’s not printed on.” —Gerald Celente

    “The U.S. dollar is going to be a bottomless pit.”—Peter Schiff

    “The Fed is never going to produce a vibrant U.S. economy by debasing the dollar, running
    money off the presses. We need less money printing, we need higher interest rates, we need more saving, we need more production, we need more exports—and what the Fed is doing is inhibiting that from happening.”—Peter Schiff

    “If you’ve studied Rome, you know that wealthy nations do collapse into Third World squalor when they allow their currency to be debased.”—Alex Jones

    “We’re getting ready to face a really big crisis, even bigger than the World War II Generation.”—Alex Jones

    “When the dollar goes, the power goes. The only way we can function now is because the dollar is the world’s reserve currency. We can pay our bills by
    printing money. No other country can do that. But when the dollar goes, we can’t pay our bills—and it’s all over. The country’s bankrupt.”—Dr. Paul Craig

    “There’s no economic recovery. There’s not going to be one. I suspect that during these next four years, we’re going to see real problems with the dollar. We’re going to see probably, finally the inflation break loose, and they don’t have any policies to deal with that.”—Dr. Paul Craig Roberts

    “We can expect a continuous and dangerous march towards corporatism and even fascism with even more loss of our liberties. Prosperity for our large
    middle class, though, will become an abstract dream.”—Ron Paul

    “If our research is right, Americans will have to make some tough choices on how they’ll go about surviving when basic necessities become nearly unaffordable and the economy becomes dangerously unstable.”—Keith Fitz-Gerald, Chief Investment Strategist for the Money Map Press

    “We’re heading for very turbulent times.”—Chris Hedges

    “We’re going to go into a depression that’s going to be worse than The Great Depression.”—Gerald Celente

    All of Barack “Goldman Sachs” Obama’s horses and all of his men cannot put the BRA together again. Currency debasement will have hellish results in The Banana Republic of America, slop bucket of the Third World.

    • And when the DWL’s start crying about the demise smacking them squarely in the face I will laugh and spit on the ground.

      BRA and the collectivist kleptocracy have sunk the ship of the blind.

    • John Wheeler

      We will never have hyperinflation as long as the dollar is the reserve currency for the world. So, we should be good for at least a month….

      • Hambone

        Pessimist. I say we’re good until the summer.

    • Syrin

      DUDE !! I quoted Max Keiser up above. It’s good to see not everyone is a GARY with their hands out demanding more of your stuff or their head in the sand, Well done.

      • sharonsj

        And not everyone is a deluded conservative either. By the way, this liberal is a prepper with guns!

        • El Pollo de Oro

          SharonSJ: If you’re a liberal prepper with guns, you’re definitely my kind of liberal. The libertarian argument I often use with the gun control crowd is, “If you claim to be standing up for women, gays, African-Americans and Latinos, why are you trying to take away their 2nd Amendment rights? If you outlaw guns, only criminals and cops will have guns.” When I really want to mess with the heads of orthodox Republi-Cons and orthodox Democraps, I tell that I’m an NRA supporter who also agrees with many of the ACLU’s positions–mamma mia, that messes with people’s heads because so many Americans are caught up in the bogus Republi-Con/Democrap paradigm. To me, the REAL presidential debate in 2012 was Jill Stein debating Gary Johnson on RT and the two of them finding a mutual disdain for the banksters, The Prison/Industrial Complex, the War on Drugs and neocon imperialism.

      • El Pollo de Oro

        Syrin: I really enjoy Max Keiser’s anti-bankster, anti-globalist rants (as well as what his sidekick on RT, Stacy Herbert, has to say). I also watch Abby Martin’s “Breaking the Set” on RT (she’s recently had Gerald Celente and Gary Johnson on her show).

    • Ralfine

      Remove the focus from the money and start manufacturing again.

      Only manufacturing, mining and farming creates value and wealth.

      All that financial investment and financial tools and financial markets just concentrate wealth in the hands of a few.

      Best things you can do – get rid of all your debts, they only grow with time.
      Get rid of your savings and buy assets like real estate or gold or food, clothing, tools, backpacks, sleeping bags, tent etc.

      Try to buy from your fellow countrymen and as local as possible.
      The better off your neighborhood is, the better for local security.

      • isab

        Most wise post here, no debts culture!

  • Mondobeyondo

    Last week’s item cost $1.49.
    This week, it’s $1.48.
    Great savings, huh?
    Get used to it.

  • B T

    Even with the artificial inflation of the DOW, it is only equal in purchasing power that it had in 2001, ten years ago. That tells us that we have been spinning our wheels for at least 10 years and probably many more. When the Market bubble bursts, the blast will take down the world economy and we will never recover to anywhere near today’s life styles. .

  • Syrin

    John Williams is predicting rampant hyperinflation by 2014. Max Keiser says the “next stag”’ of the global financial implosion will occur by April. So in other words, liberal economic policies working as intended. MEANWHILE, Germany and Switzerland requested to have all their gold repatriated signifying a loss of faith in the US fiat currency AND a record amount of money was withdrawn last month from major banks signifying a loss of faith US currency by the general pop’l. Central banks and nations are ALL stockpiling gold at record levels which is only further evidence that a currency crisis is coming and as I told GARY over a year ago, Obama will make us WISH we lived in Zimbabwe or the Wiemar republic.

    -liberalism – destroying nations for centuries

    • Mondobeyondo

      I don’t always believe what John Williams or his Shadowstats website says – but I think he’s making the right call on hyperinflation. He keeps changing the date on it (2010.. no wait, 2011.. maybe 2012.. hold off, might be 2014.. maybe 2015?). But as I’ve said several times, you can’t fix a specific month or year when it will all go down, only that it WILL go down.

  • Syrin

    Speaking of which, did you see the Rothschilds are buying a mega ton of gold?

  • Angry

    I know what we need to do. Capture these bankers, chain them up and feed them money.

    OF course they won’t eat it. But they have so much of it, they might as well, right?

  • RealMan

    Federal Reserve Money Printing Is “NOT” The Real Reason Why The Stock Market Is Soaring.

    Don’t listen to the author of this article.

    The article is good for reading, but it is not the real reason why the stock market is soaring.

    • enlighten us please

      • Hambone

        It sounds like he was trying to use a Jedi mind trick. I saw Obi Wan do it to a couple of storm troopers.

        • Beth


  • jetgraphics

    Our Usurer / Socialist leaders are quite clever. Through debt, they locked millions into lifelong servitude. They didn’t nationalize private enterprise outright. Instead they imposed a labyrinth of regulations and rules, and a bevy of taxes, so that government is indirectly in control, and must be placated first, before any new enterprise is embarked upon – burdened by the bureaucratic red tape and partisan politicians.

    The once free Americans now must get permission (license) and / or pay a tax to live, work, buy, sell, travel, build a house, enter occupations, operate a business, transmit, fly a plane, hunt, fish, trade in medical care, buy medicine, cut hair, marry or own a dog. And even after they die, the tax man gets a cut.

    Welcome to the People’s Democratic Socialist Republic of America – where that which is not mandatory, is licensed, taxed or forbidden. (And do not forget your ID papers-s-s-s-s-s-s!)

    • Do you really have people who marry dogs?

    • B Wolfe

      Maybe if people would quit being dumbasses on how they conduct their business we wouldn’t have needed all the regulation and certification. geh…whatever. Sick of politics.

  • Cleo

    The printed money inflates whatever market it infiltrates by creating a false demand for a fixed amount of supply. The beneficiaries of the fiat dollars aren’t loaning it out, so they purchase stock probably on orders from the Fed. The same thing will happen in the housing market courtesy of Dodd-Frankenstein as govt entitlements are now considered income to purchase a home, but housing sales are still dismal. Ironically, the worst thing that could happen right now is for the economy to improve and banks start loaning out money. This will flood the economy with “cash” and inflation will go wild. It’s hard to figure out now where inflation is due to money supply or the regular forces of supply and demand. Govt sponsored demand side economics has never worked and never will, but we keep doing the same old thing by manipulating the markets. The “feel good” Dow won’t feel so good shortly.

  • istokov

    Политика элиты направлена на снижение среднего класса.Из среднего класса вырастают представители новой элиты,что беспокоит старую элиту.Увеличение количества членов элиты за счёт новых членов из среднего класса не выгодно старой элите.Fed это финансовый инструмент элиты для осуществления своих целей.Вероятно Fed будет продолжать политику снижения курса доллара пока не начнётся пикирование доллара во время которого Fed может отказаться от старых 1$ and 100$.Замена старым долларам как всем известно готова,также то,что такое возможно подтверждает появление банкоматов выдающих 1$.Если это произойдёт то такая операция будет оправдана тем,что большинство старых 1$ and 100$ поддельные.

    • most of us agree with не начнётся пикирование доллара во время которого

      • istokov

        Вероятно FED на это и расчитывает.

        31.01.13, Disqus написал(а):

  • Jodi

    Walmart is the worst for price increases. I don’t shop there very much anymore but last weekend I shopped there & didn’t leave without spending $150.00. About 10 years ago I could shop there for around $100.00 for pretty much the same stuff. I’m not just singling out Walmart, others are just as bad but Walmart used to be the place for savings. It is no longer that leader. Our income has changed dramatically for the last couple of years but fortunately we are able to make ends meet. I can’t imagine what other families are going through right now. It’s only going to get worse.

    • Tim

      You’re right about food prices at Walmart. I went into a Walmart recently, and I was surprised at how high the prices, in general, were. Believe it or not, it’s cheaper to shop at Trader Joe’s. And most of what Trader Joe’s sells is better for you. I love Trader Joe’s.

      • Jodi

        Thanks, I will have to check Trader Joe’s out! Unfortunately, it’s about 30 minutes from where I live.

  • Scott

    What we are living through is the end of the post-WWII Bretton Woods “Petro dollar” system.The dollar simply does not instill the confidence it once did in global trade and finance.Unfortunately,this thing will play out for a few more years as foreigners still hold over $5 trillion in U.S. debt.But,with Germany repatriating its gold form NY and London over the next 7 years, Abe in Japan printing 20 trillion more Yen,SINOPEC and ARAMCO building the largest oil refinery in the world in Yanbu,and the Fed now being the only buyer of U.S. treasuries while keeping interest rates at 0%(a catastrophe to be sure),the global move away from the dollar has commenced.Buy gold and silver,get out of all paper vehicles including 401k(the government will be coming for this $7 trillion soon),love your family,and try to derive as much happiness as possible from your life.

    I believe that by 2020,the situation will be crystal clear for even the most economically ignorant and uninformed citizen. “Triffin’s dilemma” will become reality!

    Use the next decade to position your assets accordingly.Or as Mark Twain once said,”I’m not worried about a return on my money.I’m worried about the return of my money.”

    God Bless

  • I think the entire thing is deliberate. Derivatives are the poker chips for the big money. When it fails, these same people will have figured a way out from under the debt and leave us stuck with the bill.
    Why is it happening in most of the nations on the planet? This is not just the United States going down. PIGS, Portugual, Italy, Greece, Spain, and the list goes on an on. Britain, Ireland, and just about every country in Europe are having the same bankruptcy problem as we are.
    I suggest you look at a system of deliberate undermining from China. India is doing it also. It is a brilliant piece of economic warfare and everyone is falling for it. These geniuses have taken the economies of the entire world and twisted them with a nation of extremely cheap labor and with government help have made it into the world’s supplier of retail goods. Just like Standard Oil did in our history, they have taken on the entire retail market and destroyed all competition.

    I suggest we all take a good look at that genius level economic warfare. We have all become dependent on these goods as they destroyed industry everywhere.
    Right now to produce these goods locally we would have to increase the price about 10 times what it is today. We would have to retool and finance the growth of local factories to take its place. No one is prepared to do this.
    This is the true genius of the Chinese government and I applaud their skills at making this happen.
    The next step is to make everyone’s currencies worthless. It is working. They now hold massive amounts of debt from currencies world wide.
    They have taken everyone’s basic greed and put the entire world in their debt.
    Even if every currency in the world inflates from $1 to $10, they are buying into the commodies market including gold and real estate to ride out the storm.
    They are colonizing. That means that they are bringing the Chinese factories to the source of their new wealth, America. They are here using those dollars to buy up real estate big time and they are ready to make factories right here to produce the goods with Chinese workers.
    When the proverbial currency market hits the fan, they will be in commodities and warehouses, ready to sell people goods with a new world wide currency.
    Eventually they will own the entire world with this plan. At least that is the plan I think they are using.
    Not one bullet fired. Not one missile used. At that point they own everything. Now that is genius!

    The only way around this is going to be an effort by our own government to change the rules. Like a giant ocean liner, it cannot change immediately. It is going to take a different attitude. That means we have to produce our own retail goods locally. It means everything in this country has to change. It means we have to be independent on our own shores. It means we have to go away from the global economy idea and get back to basics.
    There is a revolution in industry today. It is called Robotics. What used to take 400 workers to produce can now be done with less than 25. Those are not meant to be real numbers. But you get the idea.

    Robotics means we need less people to produce more goods. It means a reduction in hours on a nation wide basis down the road. We did this in the 30s. We went from a 48 hour week to a 40 hour week. Professionals went to a 35 or even a 32 hour week. This means we can compete with countries with slave labor wages. But it is going to take quite an adjustment to work out the details.

  • 2Gary2

    the conservatives are the real voter fraud: A Nevada Republican arrested for voter fraud in the 2012 election, after
    claiming she was trying to test the system’s integrity, pled guilty and
    accepted a plea deal Thursday, forcing her to pay almost $2,500 and
    promise to stay out of trouble.

    • MeMadMax


      Despite all those EVIL Conservatives trying to steal the election, obama got reelected….

      Are you that bored or unemployed to come on a website and spew gibberish on purpose like this?

      • 2Gary2

        yes really–like I said they sure did try they just failed. The conservatives are ramping up their efforts at election theft with the silly reapropreating of electoral college. And yes the conservatives ARE evil trying to disenfranchise voters. They know they will never win any fair election going forward as they are the Gray Old Party

    • LMAO at clueless pos libs

  • drbuzzsaw

    Wife started working at Walmart 7 years ago. (Yea I know WALMART). But my point is: 7 years ago Campbell’s Beef Broth was on sale for $.39 (39 cents) a can.

    TODAY that same can of Campbell’s Beef Broth is still on sale but now you will pay $1.44 for the same can of Beef Broth.

    This is what Obummer has done for us. But if we had of elected a Republican we would still be paying $1.44 for that same can of Beef Broth, and still be in the same position, so what do you do???

    Hell On Earth Is Coming With A Vengeance.

    • Mondobeyondo

      Good. Grief.!!

      $1.44 for a can of beef broth? To be honest, I’m not surprised. Ribeye and T-bone steaks are regularly in the $8.99 ~ $14.99/lb. range at our local grocery stores, and that’s not even prime! (Prime grade is typically for steakhouses.) That’s for USDA choice grade. Can’t afford steak anymore…

  • Patriot Alice

    Voodoo economics it’s called…Print, borrow and spend is the ruin of our country…Balance the budget with spending cuts, not tax increases.

  • Government doe not and cannot create jobs, but it can kill them, so this is no surprise. Part of this is in response to businesses hoarding money for the past few years attempting to wait out the recession, the other part is because business is afraid of the Obama administration and their regulatory and tax policy. Now is the time, they have decided, to take the profits. When that is done, the market will drop dramatically.

  • wally

    I think you left out a few numbers in your scenario Michael. When the banks fail, your debit and credit cards will no longer work. Your retirement accounts will vanish. One day in the not so distant future you will go to get gas in the morning on your way to work and your card won’t work. The rest will lead to extreme social unrest and martial law, etc. The military is not running operations in every major city in the US for no reason. I think they are preparing for riots, etc. Prepare yourself now and have a plan. If you live in Chicago, LA, Miami, NY, St Louis, Houston, and on and on make plans to get out of the city fast. Society will only take a few days to break down to the point where roaming gangs rule the streets. Look at Long Island…People couldn’t even take care of each other and make it a few days without bad things happening. New Orleans was a cesspool after Katrina with crime, etc.

  • Hammerstrike

    The financial markets are the takers, of the wealth fleeced from the producers.

  • Mike

    One hypothetical question to the author of this blog – If, hypothetically, you had Bernanke’s job, what would you do to fix the economy (with all the negative variables that he had at the beginning of ’08)? I would love to hear an answer to the problems we have. We know the problems, now it’s time for solutions. So my challenge to you is to place yourself in his (Bernanke’s) shoes and tell me (us) what you would do to solve the problems he had (and still has).
    BTW. I love your blog.

  • Mondobeyondo

    Thanks, Ben Bernanke! Your QE3 is working wonders for the American economy! The Dow Jones is rocking, housing prices are rising, and jobs are coming back. The Great Re-Depression is over! Heck, you might even be Time Magazine’s 2013 Person of the Year! Assuming you can keep everything together (i.e. not let it fall apart like it did in the autumn of 2008).

    Yeah, whatever. The Dow keeps rising, and the value of your money keeps falling. Don’t believe it? When was the last time you went to the grocery store? Been to the post office today? Surprise – first class postage stamps cost 46 cents as of Sunday. Everything is going up.

    Guess it all balances out in the end.The whole thing is a disaster waiting to happen. We are being set up for a mighty big fall later. Exactly when, nobody knows. But it’s coming.

    “You cannot change the laws of physics!” – Scotty to Captain Kirk, in the original “Star Trek” series

    • TtT Engine

      “We can balance our engines into a controlled implosion.
      That’s only a theory.
      It’s never been done.
      Bridge, have you found Mr. Spock yet?
      If you wanted
      to chance odds of 10,000 to one, maybe” It is in God’s Hands as it always has been. All we have to do is reach out and and grab His Hand and live by His Commands, Captains ! Christi Fidelis !!

  • Mondobeyondo

    Well, with the exception of the Civil War period, when inflation did certainly increase, the value of the dollar was essentially stable… until 1913. Sure, there were spikes and stuff – the Crash of 1873, the Crash of 1907, and so on. But for the most part, your dollar in 1840 was worth more or less the same as your dollar in 1910. How times have changed.

  • TJ

    I think that the money printing is the most wonderful thing in the world. It will destroy the US and then the EU better than any attack ever could have.

  • Tony

    First of all, QE isn’t money printing, the author needs to understand what an LSAP (large scale asset purchase) actually is. QE is simply as asset swap, an increase in reserves simply isn’t an increase in the base supply of money, nor is ‘money printing’ – or increasing the supply of money – the sole reason for inflation.

    Secondly, gold isn’t a productive asset, like Treasuries or stocks. A thirty year Treasury has outperformed gold and historically, over the past two centuries, stocks have averaged a 7% return adjusted for inflation, a way better investment than gold. Gold isn’t a productive asset like a stock or mutual funds which can increase as companies generate profits, it doesn’t matter if the social unit of account is the dollar or wood chips. Gold is driven by speculation (gambling) and will always return to baseline.

    With that being said, I think the real issue in the US is that wages have been stagnant and there has been massive improvements in productivity.

    Our biggest problem is derivatives, because they allow a small minority of players in finance to destabilize the whole global financial system. They should be taxed or banned through SEC regulations of some sort,

  • Ava

    I think your analysis is “spot on”. I just wish more people would pay attention to what’s coming and plan accordingly. Thank you for your insightful articles.

  • Tony

    It was a disaster, during the 19 century there was a banking panic every decade, followed by a recession or depression, all thanks to the gold standard and some other factors.

  • To earn profit by investing money in share market is not
    difficult, it can only happen when the trading is done with proper daily research reports.

  • I’d steer clear of those “Gold Backed” IRA’s, If you are going to rely on gold, rely instead on the physical commodity and not a piece of paper that is nothing more than a “promissary note”
    In 2012 when the almost overnight decline of gold value struck, there was a VERY good reason behind it. Investors at that time literally flooded the commodities markets with the “paper” gold…Thus driving the prices intentionally down. We are now in somewhat of a “holding pattern” waiting for the precise moment when it becomed HUGELY profitable to buy the physical gold.
    Savvy investors will at some point,(likely soon), begin buying MASSIVE ammounts of the physical gold which will inevitably cause a “run” on the gold market…..When this hapens,(and I state clearly the “when” and not the “if”.) Gold,(and silver/platinum), prices will break all records. These investors arent going to be buying gold by the ounce or even the pound….They will be buying literally by the TONs!
    This will be the trigger event to a total economic and monitary collapse….Just sayin…

  • Lese Majeste

    I believe those ‘Too Big to JAIL’ Wall Street banks are using some of that Fed funny money to invest in the stock market using offshore sites that are nothing more than fronts. This keeps the market juiced and looking like a good haven to invest in to lure the suckers back to the craps table.

    They generate a lot of activity, but it is all a fiction.

  • ocean

    Circulation of money keeps the economy alive.
    The total National Debt will stop the circulation of money.
    The Banks will hold onto the money. No jobs and layoffs.
    Interest rates will go up big time. Bernanke printing money to
    buy Bonds will do nothing. The Stock Market will crash in 2013.

  • Howard Gle Martinez

    I was shocked to recently hear a popular female CNBC talking idiot refer to the FED injection of money into the economy as “free money.” Let my tell you, Baby, Open your Eyes, Nothing is Free in this World.”

  • Howard Gle Martinez

    I was shocked to
    recently hear a popular female CNBC talking idiot refer to the FED
    injection of money into the economy as “free money.” Let my tell you,
    Baby, Open your Eyes, Nothing is Free in this World.”

  • happy Jose

    If paper gold etf is a bubble should I go 2x short with DZZ?

  • jamie

    People need to quit looking to the gov’t for solutions , gov’t is the source of the problem .

  • Angelo_Frank

    The US Federal Reserve is pumping $85 billion a month in virtually free money into the financial system, fueling the stock market boom. This is more money in a month than the $76.6 billion the federal government
    spent all of last year to provide SNAP benefits to 47.8 million impoverished Americans.

  • Omar

    I just saw that Dominoes Pizza was up 44% YTD!!!! Dominoes and the Pizza Industry is already saturated everywhere with very low growth opportunities. Usually individual stock prices rise based on forecasted future earnings – Dominoes is not even close to a growth stock! Ridiculous!

  • Guest

    Is SDOW a good way to protect from the coming crash?

  • Portra777

    Please don’t jump on me…I am new to this. But someone told me that an ETF called SDOW would be one way to protect against the coming crash. Is that true?

  • Little Johnny

    Without digressing too much it’s important to understand why this is all
    happening and it’s really very simple. Global inter dependent
    economies are based on a collapse formula. Infinite growth with finite
    resources. This simply cannot and will not work. It’s basic physics.
    Milton Friedman and his cohorts will go down in history as the greatest
    mass murderers of all time. When I say “mass” I mean billions. The
    economic collapse is merely the first warning shot. What follows
    (resource collapse) will make every human tragedy that very occurred,
    all combined, pale in comparison. It’s going to happen soon and most of
    you know it. You can feel it. There is an uneasiness out there that
    is palpable. If it was just about paper there would be no problem.
    Ponder that.
    There is a certain laughable irony in all this.
    Countries like Sudan, Cuba and Zimbabwe (so called Economic basket
    cases) will very soon be the envy of the world. That said I do cringe
    when I read about Cuba trying to emulate the “West”! Wake up Castro.
    You were right all along. We were living in the dream world not you.
    Don’t f&ck it up now! SYRIN all I can say is you are on the right
    track you just haven’t gone far enough down the road and seen the
    cliff. Zimbabwe will be seen as a haven in the not to distant future.
    Most African villages are very self sufficient and not reliant on power
    or oil.

  • nohome here

    derivatives hum , I forgot about those critters ! yup they can getya but then TBTF´S hold thoses suckers and then, they don´t have to worry as long as they determine what a sovereign default is anyway so no worries there. look greece made it through ´,ahum and our tbtf´s didnt have to invoke their derivitives insurance causein ifs they did then they would not have the funds in the insurance fund to pay cause they dont deposit enoug…. … well then that could cause an economic colapse .Right? ya know maybe thats why everyone is so afeared of not just greece but spain and italy and portugal ect…, what hides behide those curtains anyway ,? we probable , as colonel jesup said ¨ can´t handle the truth¨

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