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    Market Update: Triple Threat!

    Three major risks the markets are not pricing in yet
    by Adam Taggart

    Friday, June 26, 2020, 1:19 PM

Since the appearance of the bearish island reversal we noted two weeks ago, stocks have struggled and so far failed to regain the highs reached earlier in June.

And another bearish island reversal happened on Tuesday:

S&P 500 Island Reversals chart

The resistance displayed by these reversals and the resulting choppiness of trading are exactly the sort of indicators we would expect to see precede a market downturn.

At a minimum, it certainly appears that the meteoric surge in stock prices since the March bottom ended in early June. Stocks have struggled since and just closed down another 2% today alone.

So with the market suddenly struggling here, what’s more likely: a roll-over or a resumption of the rally?

We invited Charles Hugh Smith, proprietor of OfTwoMinds.com as this week’s expert guest onto the program, and he reveals three key threats to the market that he thinks are dangerously underappreciated at the moment.

One, sentiment remains euphoric, yet covid-19 cases are resurging across the US. The market is currently treating the coronavirus likes it’s ancient history. If cases and deaths continue to build momentum from here and force a roll-back of lifted restrictions, stocks will be forced to price in the additional damage to the economy.

Two, the Federal Reserve is coming under increasing public criticism for how its policies and intervention are painfully exacerbating social inequity. The Fed may not be able to continue denying and deflecting, and may re-direct more of its future efforts to Main Street vs Wall Street, removing the key (only?) pillar supporting today’s asinine stock prices.

Three, entities like the Fed who make up the Deep State, which has warred with President Trump over the past four years, may have incentive to let the market crash this summer. Trump has very visibly tied his administration’s performance to that of the stock market; if the Deep State desires to deny him a second term, this is the most lethal weapon they can fire at him.

In this week’s video, we debate Charles’ “triple-threat” outlook with the the lead partners at New Harbor Financial, Peak Prosperity’s endorsed financial advisor, who then also share their latest insights into the road ahead for investors.

Suffice it to say, we are now seeing multiplying signs of market vulnerability that only the imprudent would ignore:

Anyone interested in scheduling a free consultation and portfolio review with Mike and John can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

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26 Comments

  • Fri, Jun 26, 2020 - 5:10pm

    #1
    MKI

    MKI

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    Dow Dividend

    Based on the historical Dow dividend, stocks look fairer priced today than pre-C19. And now we've good data how the Fed is very, very successful at juicing the market even during a black-swan crisis where the market should stay tanked. Bluntly, I'm looking at the same data as the panel here yet come to a completely different conclusion.  The only question: when will the Fed run out of rope? And sheese, they now have the perfect cover with C19 for a direct transfer of cash from them to us. Why not tag along using stop-losses?

    Regarding the Deep State going after Orange Man via stocks? First, why not take OM down right after his election, in the same way Jimmy Carter was made to look like an economic fool from day one? Second, who do you think owns all the stocks? Why would the DS slit their own throats?

    Personally, I shun wild political theories about OM. Instead I just follow the data, like the Dow dividend, screaming for 13 years: invest in dividend-paying stocks (Jun 2.63, May 2.69, Mar 2.56, Feb 2.25, Jan 2.22, Dec 2.25, Nov 2.27, Oct 2.31). It's saying the same thing now. Remember we are in a ZIRP environment with high actual inflation (check out education, healthcare, housing costs, so 5% stock gains are just breaking even, and 10% stock gains should not be excluded with peace/productivity). But the productive gains are real: this is the largest silent transfer of wealth from "us (wages) to "them" (stocks) in US history. And yes, this could go on for the rest of our lives. FOMO? TINA? Bueller? Anyone?

    Besides, not all stocks in the "stock market" are overvalued based upon historical metrics: below are 5 cash-generating, dividend-paying stocks from each section of the economy dutifully transferring cash from wage-slaves to the PTB. Hell, PM and ABBV are paying 92% & 79% of their profits to their stock owners each quarter. This is real money, real profits. being paid in cash to stock owners, not theoretical "earnings":

    COMPANY     ROIC    FCFY    Dividend    Payout    Sector

    1 Philip Morris PM 29% 7% 6.38% 92% Staples
    2 AbbVie, Inc ABBV 25% 7% 5.09% 79% Health Care
    3 Charles Schwab SCHW 14% 7% 2.01% 28% Financials
    4 Omnicom Group OMC 14% 6% 4.75% 43% Comm Svcs
    5 Reliance Steel & Alum RS 14% 10% 2.58% 25% Materials

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  • Sat, Jun 27, 2020 - 9:15am

    #2
    jonbirch54

    jonbirch54

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    Charles Smith theory is inane

    TRUMP APPOINTED DEEP STATE SWAMP TO HIS CABINET----Mnuchin,Tillerson, Mattis , etc etc etc

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  • Mon, Jun 29, 2020 - 7:05pm

    #3

    Jim H

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    David Collum defends conspiracy theorists everywhere

    https://redliontrader.com/stream/dave-collum-goes-deep-on-conspiracy-theories-9-11-epstein-pizzagate-jfk-the-vegas-shooting/

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  • Mon, Jun 29, 2020 - 7:13pm

    Adam Taggart

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    Check your emotions

    Tatagirl --

    I recommend you look inward given the emotional heat behind your response.

    I am not "peddling" anything. I simply asked Charles to expand on an interesting (to me, at least) thought-exercise he recently published at his website.

    It was an intellectual exploration of a potential outcome that is not on many folks' radars right now. There is no partisan pro-Trump or anti-Trump motive behind the discussion. You'll note I let Charles summarize the idea and then we moved on. I didn't embrace, endorse or debate it with him. So I have no idea where your "peddling" accusation comes from.

    If you don't think Charles' idea likely, fine. Feel free to either refute it with logic, or ignore it if you think it not worth your time.

    But to flame me, ascribing motives that aren't there, is a clear sign that you're triggered by the subject matter and emoting rather than thinking. I suggest you reflect on what is it about this topic that is so disturbing to you and explore how you may be able to shift your thinking to give it less control over your peace of mind.

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  • Mon, Jun 29, 2020 - 7:33pm

    tatagiri

    tatagiri

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    Re:Check your emotions

    Adam,

    let me start with the fact that I do have a very high respect and regard for you & Chris and appreciate the lot of good work you do here. I come here for a high quality content you put. Sorry, if it came out a bit harsh and may be "peddling" is not the right word of choice.

    Even if it was an intellectual exercise, if we talk a lot more about lockness monsters and UFO's - at some point we would be standing far away from the verifiable facts. I am all ears - if you give facts or evidence or even some reference where we can verify or research.  What has triggered me is the whole concept of deep state which lacks any kind of accountability or clarity. You can keep blaming the deep state for all the bad things, and take the credit for good things. In that world, Trump is never wrong - it is always the deep state's fault. That logic gives growth to unchecked power and faith in one person.

    Again, I am not saying it exists or does not exists. Seriously, I don't know. But all i know is that -  I expect better presentation and layout of facts from you and Chris.

    Thank you

     

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  • Mon, Jun 29, 2020 - 9:13pm

    MKI

    MKI

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    It was an intellectual exploration

    It was an intellectual exploration of a potential outcome that is not on many folks' radars right now.

    Amen. I wish to say that, although I may disagree with much of the post, these deep-dive discussions are  exactly why I visit PP. They challenge my thinking using reason and evidence. And: I never dismiss Charles' viewpoint lightly :-).

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  • Tue, Jun 30, 2020 - 5:33am

    phusg

    phusg

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    Peddling?

    You'll note I let Charles summarize the idea and then we moved on. I didn't embrace, endorse or debate it with him. So I have no idea where your "peddling" accusation comes from.

    @Adam, you are obviously the host and presentor here, you invite a guest on and give them a platform to promote (a summary) of an idea of theirs, but give no push back at all or debate the idea with them. Now peddling may well be a bit negative and strong of a word, but don't you see how this presentation implies you at the very least feel the idea has merit?

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  • Tue, Jun 30, 2020 - 6:27am

    #8

    Barbara

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    Tatagirl sounds like your world revolves around partisan politics

    Our world view doesn't get distorted by trump-phobia, we just know a toxic idiot when we see one and then move on to real problem identification and solving, not anti-government rants. Those of us who have worked as mid-level professionals in corporate America know the power of high level insider elites to make decisions benefiting themselves while distorting  both public and inside information to hide the amount of self-benefiting action.  Why would you think the government is run any differently?  Especially when you see who benefits from the unethical decision making.

    So you ask where was the deep state pre trump?  Perhaps it was behind Obama's fatal choice of Geitner, an industry insider, to NOT rein in toxic banks, just give more bailouts.  Perhaps it contributed to DNC efforts to deny Bernie in 2016.  Or maybe it was seen when Haliburton received no-bid military contracts and New Orleans reconstruction work (where they received an exemption to hire undocumented workers).

    Who are these mysterious puppeteers? Good Question.  We do know the revolving door where industry insiders come into government positions, promote regulations favorable to their industry and unfavorable to main street and then return to an even more lucrative industry job at a higher salary.   We know the wealthy buy elections for their pet congresspeople and escape obvious regulatory control in return.  So then we have Charles' question of who else inside the beltline is involved?  The Fed? Treasury? - smoking guns there, but no clear fingerprints.  More subtle and less know are things like the corp of engineers helping Houston developers to build inside the corps' flood water drainage basin without clear warning to home buyers and then opening the gates and destroying homes in the downstream drainage basin which were not in a flood-prone area (even of a stalled hurricane) UNLESS the corps sends walls of water into your home.  Faceless bureaucrats and city officials worked with greedy developers to create this situation.

    So you have a point. While we see the results everywhere, naming the people facilitating these things is not so easy.  PP focuses on the results -- more income inequality and economic disruption.  Personally, I'm not sure I care which gang member fired the fatal bullets. We need to focus on mitigating/stopping the results.

     

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  • Tue, Jun 30, 2020 - 8:53am

    Mohammed Mast

    Mohammed Mast

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    Close?

    You have stepped in it.

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  • Tue, Jun 30, 2020 - 9:20am

    #10
    Sparky1

    Sparky1

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    This PP "tribe" is rough on newcomers and those with differences of opinion.

    Well, it looks like Tatagirl removed her/his posts. I sure some here will proffer their reasons and opinions as to how they believe Tatagirl erred in approach, choice or style of language used, "faulty" or flawed reasoning, or inappropriate or unfounded criticism of a beloved member of the PP tribe (in this case the perceived slight made all the more pronounced as it was against of one of the PP founders/principals).

    Regardless, I have no doubt that the swift and sharp responses Tatagirl received will discourage others--especially newcomers--from posting to the site, offering up differences of opinion, or even remaining members of PP.

    There must be a better, more compassionate way to engage our new members and those with views that do not reflect the prevailing narrative of the more vocal "majority" members of the PP tribe. Instead, "transgressors" receive an onslaught of expertly wielded, razor-sharp verbal swords from PP "seniors"--champion "truth warriors"--who deftly deliver well-placed, well-articulated verbal cuts designed to subdue these "transgressors" into submission, silence or exile.

    Those who have been here a while know the routine as it has played out repeatedly, regardless of whether the cast of characters and particular topic/"transgression" differ.  There have been several such instances in the past few weeks and months. Some here seem to be energized by this ritual and may find it very empowering, validating their sense of tribal cohesion of being part of "The Remnant".

    To me, it is painfully sad and troubling to witness. Again.

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  • Tue, Jun 30, 2020 - 10:25am

    JWhite

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    Replying to Tatagirl

    Tatagirl - I didn't read your initial comment but I assume your objection was to Threat #3 regarding the idea that the Fed, as a non-elected group of individuals working in an institution with wide-ranging powers (the 'deep state' idea) could try to influence the upcoming election.  As one of the overseas followers of this site, I didn't see anything that suggested pushing a political agenda in this discussion.  If we were to replace the words 'deep state' with 'central bank', we could observe that the Federal Reserve, like all other central banks around the world, has been successful in controlling the stock markets in their respective countries.  If they can superficially keep the markets going higher, then it is logical to assume they can also instigate a crash if they wished to.  Why they would wish to do this is a matter of speculation.  Charles' comment seemed to me to be simply a matter of considering a potential power play by an institution that is capable of exerting influence in the country, not a comment for or against the current President (and such a power play could be enacted regardless of who was President).  It sounds a bit dubious, but then again perhaps all the 'smart money' will have their money out of the U.S. markets by that point.  And, who knows?  Maybe he's right..... lots of groups try to do what they can to influence the outcome of elections....

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  • Tue, Jun 30, 2020 - 10:33am

    #12

    Jim H

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    Epic post by Sandpuppy outlining aspects of Deep State control over mass media

    Worth a look for anyone exploring the concept of the Deep State;

    https://www.peakprosperity.com/forum-topic/hydroxychloroquine-vs-the-globalist-deep-state/page/41/#post-571429

     

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  • Tue, Jun 30, 2020 - 11:17am

    #13
    tatagiri

    tatagiri

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    Peace and Love !!

    I am just saying it again - peddling was not the right choice of words. I am least interested in partisan discussions or the details of deep state or lack there-of. Let me build up the context of what caused the trigger - As I mentioned, I like the content Adam and Chris put here and take the content very seriously - for example from one of the Adam's alerts - I did make pretty big reorganizations of my savings and pulled them out of the market to safer places. It was not smooth and I had to pay some penalties for that move. Again, it is of my own volition. With that in background - While going half way through the talk - I heard discussions on deep state and how it is going to impact the market etc..  That pretty much made me question if I was making the choices based on sound research or just made some panic moves because of conspiracy theories. Again, it may be interesting intellectual tour to look at that. But, with so much of misinformation in MSM and  PP being my trusted source - I can hardly tell if Adam is being serious or is it a just intellectual exploration. It was very hard to see the continuum of solid data and charts followed by the question about deep state and economy.

     

    @JimH /@Barbara -  I am not assuming that there are no conspiracies ever or the powerful do not collude to preserve and expand their power. Every institution,  especially large governments and  corporations pretty much do everything in their might to preserve themselves and expand.  Even, lifeless self-organized sand dunes grow and expand.  It is the same thing when Bernie calls a rigged system or you call it deep state.  However,  the question is whether this is something which is a deliberately organized network or just a symptom of culture and behaviors due to how incentives are placed. For example - like Enron, there was no single person who can take the blame but it was the culture and how the incentives were placed made them act like a ponzi scheme. Using occam's razor I would prefer a simpler explanation for systemic issues and institutional unfairness to masses, rather than a deliberate secret network of conspirators.

    One thing I did learn from this episode for sure - is to take everything  on PP with a grain of salt. PP is mix of everybody ( yes, i did see those charts), some are very technical and experts in their fields and some are not. Some are very logical and detached, and some with strong partisan leanings. Also, the content  - some of it is very organized with references to peer reviewed work and some speculations from fringe ideas. But I do like the community, for the fact that it stands apart from the mainstream and has values based on integrity and looking for a prosperous and sustainable future. Sorry, again for using harsh language.

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  • Tue, Jun 30, 2020 - 11:34am

    #14

    Jim H

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    Well stated Tata...

    Now we are having a dialogue... and I readily admit to being harsh and unrelenting in arguing for learned truth.

      Using occam's razor I would prefer a simpler explanation for systemic issues and institutional unfairness to masses, rather than a deliberate secret network of conspirators.

    Occam's razor can lead you astray.  Many people argue that 9/11 could not have been an inside job because it would be impossible to have so many people in on the conspiracy.  I'm sorry, but in the face of chemical, thermal, and physical evidence we know for a fact that building 7 was imploded... and that the government, via NIST, lied to us in telling us that it fell due to, "normal office fires".  Occam's fails us at times.  I join you in wishing it were not so.     

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  • Tue, Jun 30, 2020 - 11:54am

    tatagiri

    tatagiri

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    tatagiri said:

    Thanks @JimH , it takes time to get adjusted to the tribe 🙂 .

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  • Tue, Jun 30, 2020 - 2:54pm

    drbrucedale

    drbrucedale

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    Trump and Sun Tzu?

    Sun Tzu, Petrarch and Al Pacino ("The Godfather") all said something like this: "Keep your friends close and your enemies closer."  Perhaps an answer to your observation about Trump appointing Mnuchin, et al to his cabinet?

    One important data point is obvious: Trump is the only President in the last 24 years who has not either begun or expanded a war in the Middle East. If a primary objective of the Deep State is to promote continuing warfare, then Trump is the only President in the past 24 years to have successfully opposed that objective of the Deep State. The only one.

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  • Tue, Jun 30, 2020 - 3:02pm

    #17

    sand_puppy

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    And, it is always OK to have a different viewpoint!

    When someone says something that doesn't seem right, we can just shake our head and think.  "Hmm.  I don't buy that."

    The trick will be, can we keep gathering and considering information even about a topic that we don't agree with?

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  • Tue, Jun 30, 2020 - 3:06pm

    RandomMike

    RandomMike

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    RandomMike said:

    That's what Trump says to Eric when he comes to him with a problem:

    "Son, sue!"

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  • Tue, Jun 30, 2020 - 4:27pm

    Mohammed Mast

    Mohammed Mast

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    Trump

    In January Trump ordered the assassination of the number one military man in Iran. I kinda think that was ratcheting things up in the ME.

    "The president’s decision to ratchet up decades of simmering conflict with Iran set off an extraordinary worldwide drama, much of which played out behind the scenes. In capitals from Europe to the Middle East, leaders and diplomats sought to head off a full-fledged new war while at the White House and Pentagon, the president and his advisers ordered more troops to the region."

    https://www.nytimes.com/2020/01/11/us/politics/iran-trump.html

    https://www.bbc.com/news/world-middle-east-53223523

    Then there is the increase in drone strikes.

    https://chicago.suntimes.com/news/2019/5/8/18619206/under-donald-trump-drone-strikes-far-exceed-obama-s-numbers

    Of course there is far more but none of us have  the time. Oh yeah almost forgot the Taliban and Russia.

     

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  • Tue, Jun 30, 2020 - 4:29pm

    Mohammed Mast

    Mohammed Mast

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    Tribe

    Adjustment is a 2 way street. Jus be yo sef

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  • Tue, Jun 30, 2020 - 7:35pm

    Jim H

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    Deep State Origins...

    Klaatu said,

    DJT campaigned against HRC as being part of the DS, while intending to appropriate its mechanisms to his own uses, and with his base already propagandized by Fox's miscreants, they have continued to exaggerate DS origins as being from the Left, which is nothing of the sort.

    Indeed the Deep State is largely a bipartisan project.  John McCain, aka no name, was one of it's high level operators.  Poppy Bush for sure.

    Last year on a business trip I sat next to a white haired gentleman on a plane who turned out to be an ex-marine.  We were experiencing some turbulence and he said his wife was texting him and was worried about him due to the weather.. he said that he had experienced much worse on planes as a marine.  As we were waiting to depart the plane I asked him if he thought we could save the Republic and what he thought of Q?  He said that the coup started in 1963, which surely is true.  He thought that Q was a LARP and that the Deep State was too entrenched to remove.  I remain more hopeful...

    I am not sure how anyone could think Donald Trump has appropriated any Deep State mechanisms for his own... indeed, I see an all out war between the remainder of the Deep State and Donald Trump and those loyal to him.  Has Donald Trump taken over money flows from the heroin poppies in Afghanistan, or is he pulling out our troops?  Seems he is pulling the troops out.

    I seem to recall that Laura Ingraham of Fox is one of the only journalists of any sort who has shined light on the efficacy of hydroxychloroquine.. is she a miscreant for doing so?  Are you sure your lens is clear Klaatu?  Are you sure you know what you are looking at?  Do you think 9/11 was caused by guys with box cutters who went on to fly commercial airliners with precision into buildings after taking a few lessons?

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  • Wed, Jul 01, 2020 - 6:05am

    Kathy

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    Kathy said:

    The assassination order was in long before.  Perhaps Solimoni was even on Obama’s disposition matrix which included Americans.  The difference is the Iran general was in Iraq.   We had the chance to get him without invading Iran.

     

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  • Thu, Jul 02, 2020 - 1:41am

    #23
    phusg

    phusg

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    phusg said:

    Three, entities like the Fed who make up the Deep State, which has warred with President Trump over the past four years, may have incentive to let the market crash this summer. Trump has very visibly tied his administration’s performance to that of the stock market; if the Deep State desires to deny him a second term, this is the most lethal weapon they can fire at him.

    This one I'm most skeptical on, but I like to keep an open mind. I would've liked to see Adam be more critical of this idea though and at least ask these questions:

    1) Is there any historical precedent for the Fed manipulating the market to influence a presidential election? (if not, why not?)

    2) If the establishment has the will and the power to deny Trump a 2nd term, then why did they allow him a 1st?

    3) How could the Fed do this without it being obvious that the Fed played a major role?

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  • Thu, Jul 02, 2020 - 7:56am

    Edwardelinski

    Edwardelinski

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    The Fed Will Not Crash The Market

    Rupert Murdoch is Jared Kushner's mentor.Ivanka Trump over saw a 300 million dollar trust for Wendy Murdoch's daughters.Alex Blankfein was a groomsmen in the Kushner wedding.Powell has at least 30 million in Goldman and Blackrock.Mnucin helped the Kushner slumlord family secure an 800 million dollar loan with Fannie and Freddie.A few names who run the joint?Fink,Koch,Adelson,Wynn,Ross,Schwarzmen,Mercer,Mnucin,McMahon,Marcus,Langone.What's left on the wish list?Payroll tax cuts and privatizing Fannie and Freddie.We are a suffering and broken nation....

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  • Thu, Jul 02, 2020 - 10:31am

    davefairtex

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    Posts: 2075

    fed dropping rates to win elections

    I studied extensively about the 1972 election - the Fed definitely dropped rates around to get Nixon elected.  The system was terrified of the Democratic candidate, McGovern, and so the Fed dropped rates, got an economic boom going just in time for the election, and Nixon won by a landslide.

    Inflation started to jump higher right after the election.

    If I remember correctly, that's also why he closed the gold window.  The Fed couldn't drop rates and have the gold window open at a time when inflation was a real issue - otherwise all the gold would flee.

    I don't have the supporting data around anymore, but it is all there if you want to go and read about it.  I think there were even audio recordings.

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  • Thu, Jul 02, 2020 - 12:47pm

    #26
    Mohammed Mast

    Mohammed Mast

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    McGovern and the Fed

    Well history is a funny thing. One can ascribe McGovern's loss to a number of factors, the least of which is Fed policy. The most of which was his choice of Thomas Eagleton who it turned out had psychiatric issues. McGovern after saying he would keep him on the ticket then took his resignation.

    Nixon closed the gold window in 1971. Charles DeGaulle took a look at what Amerika was printing on the Vietnam war and the "Great Society" of LBJ and decided gold was more valuable than paper smeared with green ink. He started cashing in his paper for gold and to stop the drain Nixon closed the window. He thus ended Bretton Woods 1.

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