Subj: Sorry I Took So Long To Respond Date: 1/9/2000 1:17:34 PM Pacific Standard Time From: livetrade@YadTel.Net To: Rayelan@aol.com
Rayelan-- >You write very well and your analys is is very good.
OCI-- Thanks. There is an original cliché in the traders world. "You are only as good as your next trade". I am not a professional (registered) financial advisor or guru. Because of other calls on my time, I try to keep up with what is going on, but it is a real struggle. In this business, it is essential to stay current on analysis and research in order to get ahead of the learning curve.
I consider myself to be a part time market watcher or student who is interested in functioning as a non-profit educational resource. If you want to learn anything about this field, I will share what I know. Of course, everyday there is something new, so school is never out. It takes time, aptitude, intelligence, and discipline, and I am limited on these attributes in various ways.
Rayelan-- >I have been listening to Neil Cavuto. He had Jim Stack from Investech Resources yesterday and he will have Byron Wien today. Both of them are predicting that the market will drop by half.
>If this is only hype to cause some kind of panic, what do you think the motive is?
OCI-- I have not seen Cavuto since he left CNBC, the only financial news network I have time to monitor these days.
Jim Stack is a perennial bear. He appears on a TV network from time to time to provide a negative viewpoint usually. He's been bearish for several years, and I wonder if his clients have missed the huge move up all this time. Evidently, he is still in business managing OPM (other-peoples-money) so he must be weighted in fixed income investments.
I just saw a Byron Wien interview recently. I can not remember his bearish points exactly, but I think he said a correction is imminent because of overvaluation. If you want to check out his batting average click:
http://smartmoney.investing.lycos.com/smt/pundits/
and
http://smartmoney.investing.lycos.com/smt/pundits/index.cfm?story=wien
"After calling the 1994 bear market, Morgan Stanley's chief U.S. equity strategist was ridiculed by industry watchers for what was then an ultrabullish call: The Dow industrials would increase to a whopping 4500 by the end of 1995. As it turned out, that market surged above the 5000 mark. 1996 also began well for Wien, but his infamous May call that the Dow would fall 1000 points still haunts him."
The markets are moved by expected and unexpected external events, sometimes catastrophic, and rumors (sometimes false). Politicians, Fed governors, and market pundits try to jawbone the markets occassionally. Of course, earnings and economic reports move the markets everyday.
So these four factors: Events, Rumors, Jawboning, and Reports, are the factors market timers who value fundamental analysis must consider.
Rayelan-- >Back in 96, the men who were giving me information talked about the "hot air" in the market. They said that it kept going up "with smoke and mirrors".
OCI-- Baring some unexpected catastrophic event such as a sneak terrorist attack or military confrontation initiated by an adversarial nation state, market panics or crashes are usually preceded by signals. The aforementioned scenario is hard to make contingency plans for and represents the inherent risks investors must accept. This is one reason why I find trading less difficult than investing, because of liquidity considerations.
I use an economic model composed of three major elements: currency flows (dollar/yen and dollar/euro), interest rates (cyclical), and valuations vrs. earnings (and the market perception thereof).
If I see the yen and euro rising against the dollar, the Fed in a rising interest rate mode (as they are now), and stocks in highly excessive price /earnings multiples (as they are now), then extreme volatility and an increased probability of a market correction is enhanced.
As for the "hot air" and "smoke and mirrors", the financial markets depend on sentiment or faith of investors. Once something triggers the panic, everyone rushes for the door, and there are no buyers. One sign is when the credit markets start rising against falling equity markets (called flight to quality). If it is a global panic, the dollar will usually reverse its fall against the yen and euro, and foreign capital will rush back to domestic credit and equity markets (if the stock market is still considered to remain in a growth mode verses foreign economies).
Yes, the whole thing is fragile (a house of cards), and to make matters worse, our leaders have allowed the system to be excessively built on leverage or borrowed capital. Thus, when the margin calls start, the central banks have to use credit (taxpayer IOU's) to make unsecured 'loans' (which are not repaid) to speculators who are 'too-big-fail'.
Rayelan-- >They said the FED group was using a new approach to creating money out of thin air. They said that the only thing backing the dollar was the sweat of the American worker... and they said that soon, the sweat of counter servers at MacDonalds and such, wouldn't be able to back the stone money in the Polynesian Islands.
>They were predicting that the Asian crisis would spiral down into wars. And that eventually China, Japan and South Korea would begin to squabble over their own enlightened interests in that area.
>Once the Far East was enmeshed in their own wars of aggression and empire building.... in search of natural resources.... a war will crop up on the other side of the world... probably the Balkans, or the middle East... They said that war was the only way to save the world from world wide depression.
>They said that the numbers game had been played and the number of deaths through starvation were too great. The numbers of deaths through war were more acceptable....
>Since much of what they said has turned out to be true... except for the timing... I wonder what you feel about their analysis.
OCI-- The following is some stuff from the net that backs this up:
UWSA FEDERAL RESERVE ACCOUNTABILITY NATIONAL TASK FORCE PO Box 081335 Racine,WI 53408-1335 The Enemy From Within II Re: ** FED-UP ** By: Thomas D. Schauf (1992)
Task Force Colleague . . . . . . . . . . . . . . September 9, 1995
Mr. Thomas D. Schauf, worked up his 30 page report, to clear up questions he had received about the Federal Reserve Bank (FED). Mr. Schauf spent a great deal of time researching the FED. (Note: We reduced this 30 page report to 16 pages, to make it more enjoyable. We reduced the number of endorsements, and none of the essential facts have been altered. We did use #12 character size from #16.) The resulting, shocking and revealing conclusions are as follows.
THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY. Article 1, Section 8 of our Constitution states that Congress shall have the power to coin money and regulate the value, thereof. Today, however, the FED, which is a privately, owned company, controls and profits from coining (printing) money through the treasury, and regulating its value.
The FED began with approximately 300 people, or banks, that became owners (stockholders purchasing stock at $100 per share - stock is not publicly traded), in the Federal Reserve Banking System. They make up an international banking cartel, of wealth, beyond comparison (Reference 1, 14). The FED banking system collects billions of dollars (Reference 8, 17), in interest (usury), annually, and distributes the profits to its shareholders. The Congress gave the FED the right to print money, (through the treasury), at no usury to the FED. The FED creates money from nothing, and loans it back to us, through banks, and charges usury on our currency. The FED also buys government debt, with money printed on a printing press, and charges, U.S. taxpayers, usury. Many Congressmen and Presidents say, this is fraud (Reference 1,2,3,5,17). (Note: References are listed on page 14 of this report.)
Who actually owns the Federal Reserve Central Banks? The ownership of the 12 Central Banks, a very well kept secret, has been revealed:
Rothschild Bank of London Warburg Bank of Hamburg
Rothschild Bank of Berlin Lehman Brothers of New York
Lazard Brothers of Paris Kuhn Loeb Bank of New York
Israel Moses Seif Banks Goldman, Sachs of New York
of Italy Chase Manhattan Bank of New York
Warburg Bank of Amsterdam
(Reference 14, p.13, & Reference 12, p. 152)
These Bankers are connected to London Banking Houses, which, ultimately, control the FED. When England lost the Revolutionary War with America, they planned to control us, by controlling our banking system, with the profit, on the printing of our money, and our ever increasing debt. (Reference 4).
Instead of the Constitutional method of creating our money and putting it into circulation, we now have and entirely unconstitutional system. This has brought our country to the brink of disaster, as we shall see.
Since our money was handled both legally and illegally before 1913, we shall consider only the years following 1913, since from that year on, all of our money had been created and issued by an illegal method that will eventually destroy the United States if it is not changed. Prior to 1913, America was a prosperous, powerful, and growing nation, at peace with its neighbors and the envy of the world. But in December of 1913, Congress, with many members away for the Christmas Holidays, passed what has since been known as the Federal Reserve Act. (For the full story of how this infamous legislation was forced through our Congress, read "Conquest or Consent", by W. D. Vennard).
Omitting the burdensome details, it simply authorized the establishment of a Federal Reserve Corporation, run by a Board of Directors (The Federal Reserve Board). The act divided the United States into 12 Federal Reserve "Districts."
This simple, but terrible, law completely removed from Congress the right to "create" money or to have any control over its "creation", and gave that function to The Federal Reserve Corporation. It was accompanied by the appropriate fanfare. The propaganda claimed that this would "remove money from politics" (they did not say "and therefore from the people's control")and prevent "boom and bust" economic activity from hurting our citizens.
The people were not told then, and most still do not know today, that the Federal Reserve Corporation is a private corporation controlled by bankers and therefore is operated for the financial gain of the bankers over the people rather than for the good of the people. The word "Federal" was used only to deceive the people.
MORE DISASTROUS THAN PEARL HARBOR
Since that "day of infamy", more disastrous to us than Pearl Harbor, the small group of "privileged" people who lend us "our" money have accrued to themselves all of the profits of printing our money -- and more! Since 1913 they have "created" tens of billions of dollars in money and credit, which, as their own personal property, they can lend to our government and our people at interest (usury).
"The rich get richer and the poor get poorer" had become the secret policy of the Federal government. An example of the process of "creation" and its conversion to peoples "debt" will aid our understanding.
***
If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered. - Thomas Jefferson
***
In the early 1930's, Bankers, the only source of new money and credit, deliberately refused loans to industries, stores and farms. Payments on existing loans were required however, and money rapidly disappeared from circulation. Goods were available to be purchased, jobs waiting to be done, but the lack of money brought the nation to a standstill. By this simple ploy America was put in a "depression" and the greedy Bankers took possession of hundreds of thousands of farms, homes, and business properties. The people were told, "times are hard," and "money is short." Not understanding the system, they were cruelly robbed of their earnings, their savings, and their property.
***
World War II ended the "depression." The same Bankers who in the early 30's had no loans for peacetime houses, food and clothing, suddenly had unlimited billions to lend for Army barracks, K-rations and uniforms! A nation that in 1934 couldn't produce food for sale, suddenly could produce bombs to send free to Germany and Japan!
***
With the sudden increase in money, people were hired, farms sold their produce, factories went to two shifts, mines re-opened, and "The Great Depression" was over! Some politicians were blamed for it and others took credit for ending it. The truth is the lack of money (caused by the Bankers) brought on the depression, and adequate money ended it. The people were never told that simple truth and in this article we will endeavor to show how these same Bankers who control our money and credit have used their control to plunder America and place us in bondage.
***
Since our money was handled both legally and illegally before 1913, we shall consider only the years following 1913, since from that year on, ALL of our money has been created and issued by an illegal method that will eventually destroy the United States if it is not changed. Prior to 1913, America was a prosperous, powerful, and growing nation, at peace with its neighbors and the envy of the world. But -- in December of 1913, Congress, with many members away for the Christmas holidays, passed what has since been known as the FEDERAL RESERVE ACT.
***
We shall start with the need for money. The Federal Government, having spent more than it has taken from its citizens in taxes, needs, for the sake of illustration, $1,000,000,000. Since it does not have the money, and Congress has given away its authority to "create" it, the Government must go the the "creators" for the $1 billion. But, the Federal Reserve, a private corporation, doesn't just give its money away! The Bankers are willing to deliver $1,000,000,000 in money or credit to the Federal Government in exchange for the Government's agreement to pay it back -- with interest! So Congress authorizes the Treasury Department to print $1,000,000,000 in U.S. Bonds, which are then delivered to the Federal Reserve Bankers.
***
The Federal Reserve then pays the cost of printing the $1,000,000,000 (about $1,000) and makes the exchange. The Government then uses the money to pay its obligations. What are the results of this fantastic transaction? Well, $1 billion in Government bills are paid all right, but the Government has now indebted the people to the Bankers for $1 billion on which the people must pay interest! Tens of thousands of such transactions have taken place since 1913 so that by the 1980's, the U.S. Government is indebted to the Bankers for over $1,000,000,000,000 (trillion) on which the people pay over $100 billion a year in interest alone with no hope of ever paying off the principal. [In 1995, the total Federal Debt has grown to over $5 trillion, with an annual interest payment of $203 billion, 14% of the federal budget. -Ed] Supposedly our children and following generations will pay forever and forever!
***
In addition to the vast wealth drawn to them through this almost unlimited usury, the Bankers who control the money at the top are able to approve or disapprove large loans to large and successful corporations to the extent that refusal of a loan will bring about a reduction in the price that that Corporation's stock sells for on the market. After depressing the price, the Bankers' agents buy large blocks of the stock, after which the sometimes multi-million dollar loan is approved, the stock rises, and is then sold for a profit. In this manner billions of dollars are made with which to buy more stock. This practice is so refined today that the Federal Reserve Board need only announce to the newspapers an increase or decrease in their "rediscount rate" to send stocks up and down as they wish. Using this method since 1913, the Bankers and their agents have purchased secret or open control of almost every large corporation in America. Using that control, they then force the corporations to borrow huge sums from their banks so that corporation earnings are siphoned off in the form of interest to the banks. This leaves little as actual "profits" which can be paid as dividends and explains why stock prices are so depressed, while the banks reap billions in interest from corporate loans. In effect, the bankers get almost all of the profits, while individual stock holders are left holding the bag.
***
The millions of working famlies of America are now indebted to the few thousand Banking Families for twice the assessed value of the entire United States. And these Banking Families obtained that debt against us for the cost of paper, ink, and bookkeeping!
The Federal Reserve has never been audited by the government since it took over our money and credit in 1913. In 1975 a bill, H.R. 4316, to require an audit was introduced in Congress.
Due to pressure from the money controllers, it was not passed. No audit of the Fed has ever been made.
