As we complete the first full week of May, 2009, the major indices continue to rally. And why not? The Federal Reserve is busy blowing another asset bubble with their monetary printing press. They are giving the banks and insurance companies a mulligan for all the money they lost through bungling incompetence. You borrow at zero and lend at ten or twenty. How do you not make money doing that? Oh, well, if you think you are so smart that you know investing and you use derivatives and credit default swaps to 'reduce' your risk and up your commissions, then you may have found a way to lose trillions. Not to worry. You can get Ben the bubble blower to steal the money from the suckers that you loaned money to in a quest to put everyone in an over-valued home. But now you have to raise a question. Which comes first - Arrogance or Ignorance?
To pull off the grandest heist in the history of mankind, I think you must first possess the arrogance to 1) think you can pull it off and, 2) the conviction that you are just. The Fed obviously took control of the US government in August of 2007. Therefore, by use of their big ol' printing press, they became convinced they could resurrect the banking industry. Note, I do not say 'the economy' because I believe that to either be secondary or insignificant to the plans of the Fed. This is about domination and the only weapon they have is money dispensed through banks that is in turned used as an enslaving device through perpetual debt. In turn, they have to have a hapless, profoundly ignorant populace with no understanding of government or central bank functionality. Look at the mental midgets that are in Congress. Who do you think voted for them? People vote for other people that resemble them!
You also must believe you are just in your actions. I believe these people truly think that the US Constitution is a rag and capitalism is wrong. The Fed tolerated capitalism until the right arm of the Fed, the banks, ran afoul of business intelligence and lost all of their money. Capitalism would have put the offenders out of business and the Fed could not allow that process to proceed. I believe these people actually think they are just in now running the US through Fed policy. Of course, this would be the first time in economic history that borrowing and printing money actually made a country richer! But hey, if you are arrogant enough, you finally find yourself believing all the hogwash heaped upon you by Congress members whose lips are stuck to your backside. So, we have arrogance in the Fed that they think they can steer the ship.
Now we have the ignorance that borrowing and printing will not work. As the US piles on the debt and the governmental controls, the country continues to lose its ability to economically function. More and more money gets consumed by the government just to pay its bills and the same happens at an individual level. We are slowly losing our ability to grow because our resources are shrinking. It is pure ignorance not to acknowledge this inevitability. So, the Fed is both arrogant and ignorant. In the end though, they are just doing what we are asking. Isn't this why Obama was elected? Isn't this why voters gave the Democrats the majorities in both the House and Congress? Haven't the majority of voters given our government a mandate to 'save' us from ourselves? Are we not completely ignorant or our own actions?
We will give up everything as long as the Dow moves higher. Sure, we got the good news from the US Department of Pathological Lying (some call this the Commerce Department) that our economy only lost 500k jobs and not the expected 600k. Of course, this propaganda machine always plays 'good news - bad news' in that they 'revised' (I'm winking rapidly at you right now in an exaggerated motion) down the job losses for the previous report. Without repeating all the lies from our government on economic data, we can all safely assume that the economy is not improving. But our government is selling the idea to us that at least the economy is only getting worse at a less steep decline. Well, that's all the stock market needs to rally. The rally has been led by the banking sector and why not? The government has been busy mortgaging every American's future in restoring these banks to their pre-Ponzi Scheme levels. You don't mind, do you? Of course not. The Dow was up. Sit down in your ignorant chair and hope for an 'Obama Stimulus' check to be mailed your way.
Now we have to attack Dow 9000. That's the only way to break the downtrend that is still in place. Isn't it extraordinary that the Dow could rally 30% in a month and a half and still only be back to even for the year? Carry on, Ben. You still have a lot of work to do!