Ever since the derivatives bubble burst, and the bank bailouts; I have had the sinking suspicion that the Federal Reserve bank and financial regulators have been undertaking a gigantic pump and dump scam intended to get the markets up just enough for major players in the financial market to liquidate their holdings and quietly withdraw from the market.
Then the Federal Reserve plans on letting the market crash on the remaining investors and less privileged funds.
The end goal of all of this is to ensure enough liquidity remains after a 1930's style market crash to give the markets enough of a financial jolt to restart the investment cycle. This will of course make the selected few obscenely wealthy even by today's standard. They will be able to pick up the pieces in a fire sale environment for pennies on the dollar.
The first warning sign for me was when the Federal Reserve stopped issuing the M3 report in 2006 which indicated the total money supply. The second was the reporting of the jobless recovery when for every day people things were and are still getting worse.
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars.
What this did was allow them to hide the mechanism of choice for providing direct life support to the economic system including them floating the European derivatives debt crisis by inflation, the creating new money out of the blue specifically for this purpose which is never intended for normal circulation. They knew when that crisis hits it will be the knockout punch for the current economic system. The M3 report would have clearly shown this type of activity.
The money supply measures reflect the different degrees of liquidity—or spendability—that different types of money have. The narrowest measure, M1, is restricted to the most liquid forms of money; it consists of currency in the hands of the public; travelers checks; demand deposits, and other deposits against which checks can be written. M2 includes M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds.
This left just the M1 report which is cash that you and I have in our pockets and in the banks, and the M2 report which is that plus smaller monetary transactions. Notice that it excludes short term loans and deposits of funds of over $100,000, and debt and asset repurchase agreements
At the same time they stopped reporting the total amount of Eurodollars and Repurchase agreements.
Eurodollars are U.S. dollar-denominated deposits at banks outside of the United States. This market evolved in Europe (specifically London), hence the name, but Eurodollars can be held anywhere outside the United States. The Eurodollar market is relatively free of regulation, and so banks can operate on narrower margins than their counterparts in the United States. As a result, the Eurodollar market has expanded largely as a way of circumventing regulatory costs
For the Repurchase agreements...
Under a repurchase agreement ("RP" or "repo"), the Fed buys government securities from a dealer who agrees to buy them back, typically within one to seven days; a reverse repo is the opposite.
Take all this together with the current news, and you have warning signs that are as big as the side of a barn. I know other regular every day people who were investing in the markets who have also seen the writing on the walls and have yanked their money out of the markets as well. It's a scary time to be an investor.
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