But critics say it’s too good to be true, and not just the usual critics. The Bank for International Settlements (BIS) is the central bank for central banks. Central banks are controlled by the apex plutocrats of their countries. The BIS is even more elite. Think of it as the Rothschilds’ and Rockefellers’ global plutocrat coordination system. The Boston Globe reports, “[The BIS] warned Sunday that dangerous new asset bubbles are forming, even before the global economy has finished recovering from the last round of financial excess.” This is a CYA announcement. Central bankers love high stock markets, but they don’t want to be accused of not noticing a bubble. When they warn of bubbles, they’re about to pop. Naturally, they don’t blame their counterfeiting of trillions for the problem.
The rest of the plutocrats already know about the bubble. MSN Money reports, “Of six major groups [Jeffrey Kleintop, chief market strategist at brokerage firm LPL Financial] identified, hedge funds, foreigners, insiders and investment institutions such as pension funds and insurance companies all are net sellers, he found.” Yet the market keeps rising because corporations are buying back their own stocks. This artificially increases stock prices, making it appear companies are growing when they’re not. This makes the stock option deals of senior management more lucrative even though their companies aren’t performing well. A cynic might conclude plutocrats are looting their companies to increase the value of their stock options so they can cash out before the impending crash. That will slow the next recovery.
This is the biggest sucker market ever, and MSN tells who the suckers are, “Only one other major group, individuals, is a net stock buyer now and individuals are buying less than corporations, Mr. Kleintop found.” Individuals are the suckers. Trapped into investing in the market because there’s nowhere else to make money on their savings because of the Fed’s zero interest rate policy, mom and pop investors are the suckers. Those who stay in the market will be wiped out.
Then there’s the housing bubble. Foreign investors are buying expensive real estate in New York City, driving up prices, and leaving it vacant to get rid of dollars before the dollar crashes. All those worthless pieces of paper the Fed has printed are coming home to roost. Ellen DeGeneres bought a Los Angeles mansion for $40 million and sold it six months later for $55 million.
Newly printed money always goes to the ultrarich first, but it eventually trickles down to provincial rich people. That’s why the sucker economy recently reached southwest Ohio. The Dayton Daily News reports, “The luxury home market continues to improve in the region, and a two-week show [in Liberty Twp.] highlighting high-priced homes offers ample evidence of that, according to the Home Builders Association of Greater Cincinnati.”
Rich people buying each other’s houses with the Fed’s bubble-money inflates prices, artificially increasing housing numbers to make it seem the housing market is improving, but the broader housing market is really still in decline. Similarly, Karen De Coster was the first to identify cupcake shops as a bubble activity, but the trendy New York cupcake chain Crumbs recently and suddenly went bankrupt. The word “trendy” frequently marks a bubble activity. The summer box office is down 20 percent in North America. US music sales are down 15 percent this year. There aren’t enough people flush with bubble-money to prop up markets for consumer goods though prices keep rising.
And despite the trillions printed and handed over to banks, they’re still insolvent. The New York Times reports, “... investors received a jolt on Thursday when shares of Portugal’s second-largest bank, Banco Espírito Santo, were suspended from trading, prompting fears that the bank might need to be rescued.” Individual European investors are suckers too. Meanwhile, the Fed considers charging exit fees from bond funds to mitigate the impending bond market crash.But the biggest suckers are taxpayers. As the bubble economy expands, all rulers, including locals, are fooled in believing their plutocrat enrichment projects, funded with money stolen from taxpayers, spur economic growth, but they don’t. They’re part of the problem. When the bubble pops, most will be abandoned because it will become clear they’re unprofitable in the real economy. The resources expended - materials, capital and labor - will be lost forever, making us all poorer. Unemployment will soar. Only the skeletal remnants of projects, abandoned buildings - some abandoned in mid-construction - and rusting equipment, will remain. Austrian economists call that malinvestment. The damage is done during the credit boom. The bust is the correction, when the economy tries to return to serving consumers instead of rulers. We’ll soon get the terrible bill for our rulers’ unprecedented looting.