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The Invisible Hand (of the U.S. Government)in Financial Markets
Financial Sense Online ^ | 04/03/2005 | Robert Bell

Posted on 04/08/2005 2:09:33 PM PDT by RightInEastLansing

Summary: The U.S. government is manipulating all major U.S. financial markets—stocks, treasuries, currencies. This article shows how it is possible and how it is done, why it is done, who specifically is doing it, when they do it, and where they get the money to do it.

Most people probably believe that the major capital markets in the U.S. are basically true markets with, occasionally, maybe very occasionally, a little bit of rigging here and there. But evidence shows that the opposite is the case—the rigging is fundamental with a little bit of true markets here and there. I have discussed how this works concerning U.S. and some other stock markets in an earlier article.[1] Here I will primarily discuss the rigging of currency and U.S. Treasury markets.

Perhaps the main reason for the urban legend that major markets are not generally rigged is that they are assumed to be too big; the millions of independent buyers and sellers, worldwide because of globalization, make effective and sustained coordination impossible. The implicit assumption is that any market could be systematically rigged if it were small enough, or at least small enough at some critical choke point....

(Excerpt) Read more at ...

TOPICS: News/Current Events
I mentioned Burton G. Malkiel's "A Random Walk Down Wall Street," to a friend, and he sent me this link to debunk Malkiel's efficient market theory.

What do you think?

1 posted on 04/08/2005 2:09:33 PM PDT by RightInEastLansing
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To: RightInEastLansing
He's claiming the 497 top mutual funds/pension funds fix the market, together with the US Treasury, in order to finance the war-caused deficits of the Bush cabal.

In short, he's a fruit.

2 posted on 04/08/2005 2:25:54 PM PDT by pierrem15
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To: RightInEastLansing

There's a lot to read there, but I don't see it adding up with what I have read so far. However, it does seem there are more than a few areas of concern, even if his main argument is not quite supported.

Thanks for the post.

3 posted on 04/08/2005 2:38:44 PM PDT by ConservativeMind
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To: RightInEastLansing
This all makes sense and is, for the most part, absolutely correct.

The best thing this country could do is return to a gold standard but that is just a pipe dream because a gold standard is incompatible with a welfare, debt-driven state...which, unfortunately, is what the US has become.

Check out this article, written by Alan Greenspan, back at a time when he acknowledged, the evil of a fiat currency

Greenspan on Gold

4 posted on 04/08/2005 2:44:23 PM PDT by Irontank (Every decent man is ashamed of the government he lives under)
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To: RightInEastLansing
A couple of years ago, I mentioned the Clinton Administration's Plunge Protection Team theory to a person who has spent 15 years with a major hedge fund. After politely listening to my iteration, he simple said:"Do you believe _everything_ that is alleged?" Of course, I do not. So,why would I believe this? I still don't have an answer. However, it still bothers me when I recall the multiple day drops of significant percentages suddenly reversed within one or two days of astounding rebounds. It got to a point, if you recall, where even professionals were shrugging and saying:"Buying opportunity."

Now, we are being told that in a weak, sideways market that was buffeted by numerous major outside events, the present Administration is manipulating global markets with hundreds of thousands of players and doing so _without_ a Treasury Secretary with experience and connections in a major brokerage firm.

I am still not convinced that the markets were not being manipulated in the 90s. If they are being manipulated today, it is so subtle as to be almost invisible.

Since I am still invested, albeit with 50% of a smaller portfolio in fixed income these days, I guess I come down on the side of "markets work".
5 posted on 04/08/2005 2:44:24 PM PDT by reformedliberal
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To: reformedliberal
I cannot tell you where it came from, but was mentioned here also in FR.

The morning of 9/11, before the Markets were offically cut off, the Really Big Players sold off their stocks ahead of others and bought short term T-Bills. As this Treasury Notes matured in the '93 & 94, they were invested back into the market and allowed the market to rebound to present highs.

There was some mention of names, they escape me at this moment. Keep in mind that they were allowed to sell off before anyone else. This was the ultimate sell high, buy low.

6 posted on 04/08/2005 2:57:55 PM PDT by Deaf Smith
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To: RightInEastLansing
I'll never get THAT 30 minutes back!

Isn't all this stuff out in the open? The PPT was used under Clinton plenty of times, no talk about that huh?

I remember the DOW coming back from an over 250pt deficit in the Spring of 2000 (I think) in a matter of 5 minutes. manipulation there.
7 posted on 04/08/2005 3:00:38 PM PDT by tonyinv
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To: Deaf Smith
If you come across the source for this, could you please ping me to it?
8 posted on 04/08/2005 3:25:11 PM PDT by reformedliberal
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To: tonyinv

I remember watching more than one episode like that, back then. I kept getting this eerie feeling that I was in a casino watching a loose slot machine in action. Whenever I mentioned this, most other investors would laugh and segue off into their latest *killing*. Very surreal.

9 posted on 04/08/2005 3:27:38 PM PDT by reformedliberal
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Comment #10 Removed by Moderator

To: reformedliberal
Last and I'm out for the weekend.

I am not big on research anymore but I bet others could find T-Bill purchases.

The thought was that these big players were needed for market stability later. To add their influx of money later to boost the economy and confidence.

The morning of 9/11, when the second plane hit, my boss and I's first thought was resession , then war. The worse would have been for the markets to stay open and risk a full-out crash. The result would have been worse than it was.

11 posted on 04/08/2005 3:40:41 PM PDT by Deaf Smith
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To: Deaf Smith

I agree.

This sort of *manipulation* is positive. I would call it enlightened self interest.

My husband and I thought the same as you and your boss. 2002 was a dismal year for my hand manufacturing business, but most people seemed to have a stiff upper lip and otherwise, it was a fairly decent year, economically, for us.

12 posted on 04/08/2005 4:42:02 PM PDT by reformedliberal
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To: RightInEastLansing

"Everything that can be rigged, is rigged." Old bookie axiom.

13 posted on 04/08/2005 4:49:41 PM PDT by Waco
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