12
Ominous Signs For World Financial Markets By lewrockwell.com
| October 9, 2010
Can anyone explain the very strange behavior
that we are seeing in world financial markets right now?
Corporate insiders are bailing out of the U.S. stock market
at a very alarming rate. Investors are moving mountains
of money into gold and other commodities. In fact, there
is such a rush towards gold that shortages are starting
to be reported in some areas. Meanwhile, some very, very
unusual option activity has started to show up. In particular,
someone is making some incredibly large bets that the S&P
500 is going to absolutely tank during the month of October.
Central banks around the world have caught a case of "loose
money fever" and are apparently hoping that a new flood
of paper money will shock the global economy back to life.
Meanwhile, the furor over the foreclosure procedure abuses
of the major U.S mortgage companies threatens to bring even
more turmoil to the U.S. housing industry.
There are some very ominous signs that something
is just not right in world financial markets right now.
Some of the signs listed below may be related. Others may
not be. That is for you to decide.
Often, just before something really bad
happens, you can actually see the rats leaving a sinking
ship if you know where to look. The truth is that if things
are going to go south it is the insiders who know before
anyone else.
So are some of the signs below actually
clues for what we should expect in the months ahead?
Maybe.
Maybe not.
You make your own call.
But it is becoming hard to deny that there
are some serious danger signs out there at this point....
#1 Corporate insiders are
getting out of the U.S. stock market at an absolutely blinding
pace. It is being reported that the ratio of corporate insider
selling to corporate insider buying last week was 1,411
to 1, and this week the ratio has soared even higher and
is at 2,341 to 1.
#2 Many of the world's wealthiest people
are buying absolutely massive quantities of gold right now.
#3 It is being reported
that J.P. Morgan is gobbling up the rights to as much physical
gold as it possibly can.
#4 The United States Mint
has announced that it has run out of 1-ounce, 24-karat American
Buffalo gold bullion coins and that it will not be selling
any more of them in 2010.
#5 It is becoming increasingly
difficult to explain the unusually high option volume that
we are witnessing right now.
#6 Some very large investors
are making massive bets that the S&P 500 is going to
take a serious tumble during the month of October.
#7 On Tuesday, the Bank
of Japan shocked world financial markets by cutting interest
rates even closer to zero and by setting up a 5 trillion
yen quantitative easing fund.
#8 The president of the
Federal Reserve Bank of New York and the president of the
Federal Reserve Bank of Chicago are both publicly urging
the Fed to do much more to stimulate the U.S. economy, including
beginning a new round of quantitative easing, even if it
means a significant rise in the U.S. inflation rate.
#9 Nobel Prize-winning
economist Joseph Stiglitz told reporters on Tuesday that
the loose monetary policies of the Federal Reserve and the
European Central Bank are throwing the world into "chaos".
#10 At the end of September,
federal regulators announced a $30 billion bailout of the
U.S. wholesale credit union system.
#11 Bank of America, JPMorgan
Chase and GMAC Mortgage have all suspended foreclosures
in many U.S. states due to serious concerns about foreclosure
procedures. Now, Texas Attorney General Greg Abbott is actually
demanding that all mortgage servicing companies in the state
of Texas immediately suspend all foreclosures, the selling
of foreclosed properties and the eviction of people living
in foreclosed properties until they have completed a review
of their foreclosure procedures.
#12 Not only that, but
Nancy Pelosi and 30 other members of Congress are requesting
a federal investigation of the foreclosure practices of
U.S. mortgage lenders. Needless to say, this controversy
has the potential to turn the entire U.S. mortgage industry
into an absolute quagmire.
So are dark days ahead for world financial
markets?
Well, yeah, but it is incredibly hard to
predict exactly when things are going to fall apart.
The truth is that there are going to be
a whole lot more "crashes" and "collapses"
in the years ahead.
The important thing, as discussed yesterday,
is to keep your eye on the long-term trends.
The U.S. economy is undeniably in decline.
The only thing keeping the economy going at this point is
a rapidly growing sea of red ink. Debt is literally everywhere.
It is what our entire financial system is based on in 2010.
In the months and years to come, the major
players are going to try very hard to keep all the balls
in the air and to continue the massive shell game that is
going on, but in the end the whole thing is going to collapse
like a house of cards.
Unfortunately, we have been destroying the
U.S. economy for decades and there is simply not going to
be a happy ending to this story.