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Fed’s Fisher: Fundamentals don’t back stock levels

Dallas Fed Governor Richard Fisher spoke a couple of weeks back and said “The Fed has artificially sustained markets.”  He spilled more beans yesterday.  He said that “fundamentals don’t support stock prices.”  Is he crazy?  Who let this guy out of the box?  Doesn’t The Fed have rules and protocol regarding making public statements?  He says this a day after Bernanke testified in opposite fashion?  Don’t get me wrong, Fisher is correct and a “quiet voice of reason” but isn’t it their job to lie?  I forget which Governor it was back about 6 or 7 years who said something like “the truth is the last order of business for a Fed Governor” or something to that effect.

The point is this, because the basic premise (the Dollar) is a lie, they ALL have to lie, lie consistently, lie in harmony, and LIE as one unit.  You cannot have 5 different stories coming out of the board which contradict one another.  The currency (the common stock of a nation) is a reflection of confidence.  How much confidence does conflicting stories build or hold?

This in my opinion is far worse than Alan Greenspan’s “irrational exuberance” speech.  At least he was only saying that the market was too frothy.  Fisher on the other hand is saying that the market should, would, never have gotten to the levels it is today without the Fed “fueling” the move.  If you read between the lines, the word “manipulation” is in there.  The conflicting information now coming out shows the actual chaos that is going on behind the scenes.  This sort of conflict amongst “bus drivers” will cause a panic where riders will simply jump off of the bus.  “Confidence” as I have said many times is THE only thing holding the system together and these bozos are doing their damndest to destroy confidence.

Let me explain this in another way.  If one of the owners of a casino came out and publicly said that his casino was “rigged,” would you go in and play there?  Of course not.  Here we have 2 separate instances where Fisher is outright telling you that the casino is rigged AND there are too many “chips” out there and still being minted, they aren’t worth face value anymore.  “We” have been called tin foil hat wearing, lunatic conspiratorialst nutjobs for even suggesting that markets are rigged.  Does anyone need any more “evidence” than a Fed Governor admitting to it?

But why would he do this?  I think that behind the scenes the situation must be about ready to blow.  Maybe he “grew” a conscience?  Nah, probably not.  My guess is that he probably wants to get out in front of what’s about to happen.  Who knows.  Just my thought.  I also believe (and have believed) that during times of financial stress, gold and silver have been suppressed.  The higher the stress level, the harder the suppression.  Yes they must take the lid off of the pot from time to time to relieve “pressure” (slow the physical demand with higher prices) but generally speaking the worse the condition the harder the price suppression has been.

Which leads us to where we are now.  The month of February just saw the U.S. Mint sell the largest amount of Silver Eagles for any February on record… while the price went down.  Did the price really go down just as bigger demand than normal was hitting the market?  This makes sense right?  Well, not really but I also understand that silver has become harder and harder to source, especially for large orders.  We know that supply is not rising yet demand as evidenced by even government reporting is very strong… so the price should fall?  This is merely another unintended consequence, when you make the price of something artificially low it will bring out higher demand.  The price should not drop as demand rises in the real world but we live in a “Wag the Dog” world where everything is made for public perception.  They must think we are all “Trumans!”

I, as the conspiratorialist nut job that I am have always believed that a hard shakedown would precede the “banking powers” positioning themselves long, very long and LONGER yet before an official markup in prices occurred.  I think that this is exactly what is happening.  Even the most hardcore “longs” are questioning their logic and downright scared.  It has not been so much that the prices have gotten killed, it is the “time” that this correction has taken (now a 5 full months).  Sentiment has been destroyed and those “polled” are bearish yet physical sales are strong.  This tells me that more and more (than the previous 1/2% of investors) are figuring out the game.  It also tells me that the “shorts” understand that they are living on borrowed time.  They are not getting the “price” panic that they used to while the “lower prices” are creating higher physical demand, in other words they are hitting the wall of diminishing returns to their paper games.

As I said last week, it “feels” like a bottom to me and this “feeling” is only strengthened by conflicting statements and obvious infighting at the Federal Reserve.  I do want to point out that gun prices have in some cases doubled over the last 3 months or so and ammo has become nearly impossible to find.  When this thing finally blows, gold and silver will become more scarce and prices will move in multiples of what we’ve recently seen in the arms market.  “Paper” money will come out of the woodwork looking for a place to hide and “real money” will be so far into hiding that you’ll see NONE on the street.  Now that’s what “supply and demand” is all about in a real world!