Over the last couple of years I have argued, sometimes passionately, that the Federal Reserve doesn’t really know what is going on within our own economy and our financial markets. Not only that, but I have also argued that they are a bunch of idiots and fools who believe that they can somehow control our financial markets.
If recently released transcripts, generated during the 2008 meltdown don’t prove my point of view without a shadow of a doubt, I don’t know what will. Here are just a few quick points from the said transcripts.
- They didn’t even realize recession was happening until the 4th quarter of 2008. By that point the stock market has completed 80% of its down move. In fact, for most of 2008 they thought the recession “could be avoided”.
—-Hello???? Was anyone home??? Recession started in Q4 of 2007.
- Bernanke talked about pent-up demand for housing as late as January 2008.
- Bernanke was worried about inflation as late as January 2008.
- Throughout Q1 of 2008 they have held a generally rosy view of the world and the US Economy
Here are the links to two great articles about the transcripts if you would like to learn more. Click Here and/or Click Here
The lesson here is twofold.
First, anyone who believes that the FED can either control, anticipate or predict financial markets and/or the economy is even a bigger fool. Neither Bernanke nor Yellen can predict the economy even if it hit them in the face with a brick. All they can do is look at past data and say “Oh, look, according to this data recession started in Q4 of 2007”. What a waste of time and money.
Second, they will always be behind the ball. They will always be a reactionary force as opposed to market makers. Take today’s environment for example. They are cutting QE and talking about raising the interest rates at exactly the wrong time. The damage from their crazy liquidity party has already been done. The worst thing they can do now is cut it. The faster they do it the faster the markets will collapse.
Why is any of this important?
Well, if you rely on FED to make money in the stock market and/or run your own business it becomes incredibly important. As such, no one should rely on any action by the FED as an investment indicator. It is as simple as that.
This brings us to financial markets and my premise that financial markets behave exactly as they should. Many people would argue that it was the FED’s actions that put the bottom in at the March of 2009 juncture, ensuring a subsequent and massive stock market rally.
WRONG.
Don’t confuse cause and effect. It was the market that made the FED’s look good and not the other way around. The market was structured to bottom on March 6th, 2009 at 6,469 and then have a subsequent 5-year market rally. It was the mid-cycle bottom (half point of bear market) and I predicted it as early as January of that year. I was 1 day and 100 points away. Close enough. I know I have shown this chart before, but let’s take another look.
If you perform the type of 3-dimensional analysis that I do you would know that the move between 2003 bottom and 2009 bottom would be IDENTICAL to the move between 1994 bottom and 2002 bottom. And so it was, exhibiting a variance of 22 3-dimensional units (equivalent to a few trading days or 100 points).
Any analyst working with this information would know that as soon as 2007 top was confirmed that the next move down would be exactly 8,130 3-dimensional units. Once the market developed further, the same analyst would be able to pin point the exact bottom with amazing precision and that is what I want you to understand without a shadow of a doubt. The stock market is not volatile or random, it is exact and precise.
Same thing applies to today’s market. In last week’s forecast I identified a turning point in February. While I am not yet at liberty to discuss this turning point (available to premium subscribers only), it clearly explains the market action we have witnessed over the last couple of days. By concentrating on mathematics and 3-dimensional analysis one can pick out turning points with a precision of a surgeon.
It is just my hope that the points above will force you to re-examine your reliance on the FED while eliminating your sense of false security.
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Warning: The US Economy Is Flying Blind…About To Crash Google
Could you post your fund track record? I have my doubts regarding your approach. Do you have your record audited? I think people would view you a more credible source if you showed them your superior returns with this investment strategy, and more subscriptions would increase as a result.
Secondly, there’s plenty of people who have claimed to have the foresight to see the new financial crisis. Do you have anything on record which shows that you clearly predicted that all those companies you were shorting (In fact if you showed the year where you just specifically shorted those companies would be great as well..)
Third and finally – why are you not in the Forbes billionaire list? You should be making fabulous amounts of wealth by timing the market expertly along with value investments. Can you explain your lack of media attention or is that intentional?
Why should we trust you about predicting this new crash?
Hi Jacob,
Great questions. I would ask the same thing if I was doing due diligence. Just a little background so you have a better understanding. There is no track record. I have spent the last 5 years running a tech company that I thought would provide me with higher returns. I was out of the market during this time. My track record prior to that is irrelevant today. I am just getting back to my investment business and I am tracking performance since January 1st in my members area as we speak.
Sure, people have doubts and that’s why I offer 14-day free trial. People can take a look and if they think it’s BS, they can look elsewhere. I could care less either way. My work speaks for itself. Again, I could provide that level of due diligence, but luckily I don’t have to. As a matter of fact, I will be closing the subscription on March 1st to new subscribers…severely limiting access to new people to 50 new subscriptions per month. Finally, as I have mentioned above. I am back at this full time since January 1st of this year. Will media pick this up…..I don’t know and I don’t care. My job is to time the markets and provide that information to my subscribers. Also, please note that I am not raising capital or looking for investors. Probably never will again.
With that said, you don’t have to trust me, you just have to look at my work. Also, I am not predicting a “crash”. I am predicting a 3 year bear market that will take the Dow Jones into 10-11K. That is hardly a crash. I hope this helps. Thanks again.