How the Banksters Broke the Market

Bank of America released a report recently which explains how the Federal Reserve Bank and other central banks around the world have rigged the equities markets.

In the United States, a corrupt Congress is also to blame, since it unconstitutionally gave the Fed the task of not only controlling the nation’s money supply but also ensuring sufficient employment and maintaining balance in the stock, bond, and commodities markets. The Fed has—deliberately, we would say—failed its mandate, seeking only the enrichment of its private member banks, like Goldman Sachs and the Rothschild financial empire.

According to Benjamin Fowler, chief of BoA’s global equity derivatives research, in a December 9, 2015 report entitled “Fragility is the new volatility,” the years since the 2008 international financial collapse have seen unprecedented central bank interventions in the market—a monstrous manipulation of such proportions that the banksters have, in fact, “broken the market.”

Fowler writes, “Essentially central banks, by unfairly inflating asset prices, have compressed risk like a spring to unfairly tight levels. Unfortunately, the market is aware the price of risk is not correct, but they can’t fight it, and everyone is forced to crowd into the same trade. By manipulating markets, they have also reduced investors’ inherent conviction by rendering fundamentals less relevant.”

In plain English, the central bankers have created money out of thin air to provide too-easy credit and even secretly bought up stocks, bonds and commodities in order to prop up an otherwise collapsing market. The market is a fraud, because real profits do not exist in too many companies, especially the largest.

The illusion of prosperity is created in this case by the central banks’ continuing injection of credit and purchases of equities. This money artificially inflates prices and balance sheets.

This manipulation has radically destabilized the markets and created a nightmare scenario. Too much liquidity—cash or credit—from the central banks has caused an artificial reduction or “compression” of risk and “forced crowding” of investors into the same trade. This compression and crowding in turn ignore the importance of companies’ fundamental worth and profitability, while producing low conviction among investors in the value and stability of the market.

Consequently, the least significant market event can trigger a panic sell-off—a “flash crash.” When investors realize the central banks are still there to manipulate the market and provide illusory “stability,” those with money left all pile back in, sometimes with even greater violence. This market “fragility” provides a new and dangerous volatility to the markets, to the point where they no longer operate according to previous fundamental norms.

Think all of this is an accident, or that Big Banking is an innocent bystander? Think again. J.P. Morgan Private Bank declared, “Mission accomplished—QE [quantitative easing] drives up equity valuations.” That is, the central banks have inflated the equities markets, in order to fool investors into throwing good money after bad. Algorithmic trading by mega-banks and traders then forces out the little guy and robs him of his money. This is a commonplace occurrence. The bankers have “broken the market.”

READ MORE > How Banksters Broke The Market