US stocks leap after Fed signals patience on rates … U.S. stocks surged on Thursday, extending Wall Street's best day of the year, after the Federal Reserve said it would be patient in increasing interest rates. Equities came off session highs, however, as oil turned lower. – CNBC

Dominant Social Theme: Things are looking really good for the dollar and US stocks. Who expected this, eh?

Free-Market Analysis: The Fed has signaled that it has moved to a slightly tougher position regarding eventual rate hikes and the reverberations are felt around the world. The dollar has benefited so far and so have US stocks.

But are the reasons being offered in the mainstream media actually the correct ones? Reading through the analysis it becomes clear that the interpretations being offered are just that.

Articles begin with what's taking place and then offer justifications for it. The whole process seems a kind of "directed history." In the US it has resulted in a higher dollar and two days of upward movements in US marts. In this case, the argument is that investors believe that the Fed's stance indicates confidence in an expanding US economy.

Here's more:

Thursday data had jobless claims falling by 6,000 to 289,000 last week, the lowest since early November. And, the Conference Board's index of leading indicators advanced in November for a third consecutive month, signalling the U.S. economy is picking up steam heading into the new year.

After a 268-point jump, the Dow Jones Industrial Average was lately up 228.69 points, or 1.3 percent, at 17,585.56, with Microsoft leading blue-chip gains that included 29 of 30 components.

… For every share falling, more than three rose on the New York Stock Exchange, were 264 million shares traded as of 11 a.m. Eastern. Composite volume neared 1.4 billion.

The U.S. dollar gained against the currencies of major U.S. trading partners and the yield on the 10-year note used to figure mortgage rates and other consumer loans gained 7 basis points to 2.2104 percent.

… U.S. stocks surged on Wednesday, with the Dow marking its best session of the year, as investors celebrated a rally in the energy sector and the Federal Reserve's pledge to be patient in raising interest rates.

In fact, on Thursday the Dow would eventually go on to realize a gain of 420 points, a high-water mark for the year. The S&P 500 rose 2.4% while the Nasdaq added 2.2%. The key to explaining recent market rallies is that the Fed is now pledging "patience" in raising rates. But other news commentary offers differing interpretations of what the Fed has indicated.

Reuters recently posted an alternative explanation in, "Dollar edges higher in wake of Fed statement, Swiss rate move."

The U.S. dollar rose against major currencies for a second straight session on Thursday in the wake of the Federal Reserve's signals that it could hike rates soon and looser monetary policy overseas.

… The contrast between approaching tighter monetary policy in the U.S. and looser policies in Europe, Japan, and Switzerland "could not be starker" and continued to push the dollar higher, said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

Rate increases are expected to boost the greenback by driving investment flows into the United States. The Fed's upbeat assessment of the U.S. economy also helped the dollar extend gains against the safe-haven yen.

We can see clearly that this Reuters article does not support CNBC's conclusion that the US stock surge was the result of a Fed pledge "to be patient in raising interest rates."

For Reuters, the stock surge was the result of an interpretation that potentially higher rates constituted an endorsement of a growing US economy.

The UK Telegraph seems to support this view as well, posting an article entitled, "Fed calls time on $5.7 trillion of emerging market dollar debt."

The thrust of this article, like the Reuters article, is that the Fed´s position indicates the potential for higher rates – and this is going to benefit the US at the expense of overseas assets.

Here's an excerpt:

World finance is rotating on its axis. The stronger the US boom, the worse it will be for those countries on the wrong side of the dollar … The US Federal Reserve has pulled the trigger. Emerging markets must now brace for their ordeal by fire.

They have collectively borrowed $5.7 trillion in US dollars, a currency they cannot print and do not control. This hard-currency debt has tripled in a decade, split between $3.1 trillion in bank loans and $2.6 trillion in bonds. It is comparable in scale and ratio-terms to any of the biggest cross-border lending sprees of the past two centuries.

Much of the debt was taken out at real interest rates of 1pc on the implicit assumption that the Fed would continue to flood the world with liquidity for years to come. The borrowers are "short dollars", in trading parlance. They now face the margin call from Hell as the global monetary hegemon pivots.

The Fed dashed all lingering hopes for leniency on Wednesday. The pledge to keep uber-stimulus for a "considerable time" has gone, and so has the market's security blanket, or the Fed Put as it is called. Such tweaks of language have multiplied potency in a world of zero rates.

Officials from the Bank for International Settlements say privately that developing countries may be just as vulnerable to a dollar shock as they were in the Fed tightening cycle of the late 1990s, which culminated in Russia's default and the East Asia Crisis.

We can see this article is considerably grimmer about the world's economy, though upbeat about how the US and its equities and currency are positioned.

For us, the alarmism is perhaps overdone. Recall, please, that the Fed has not done anything yet. Not a single thing.

And in its conclusion, the article backs off the alarmism just a little. "In the end, the Fed may not be able to raise rates, or at least not by much… Both of the G2 monetary superpowers may have to pull the stimulus lever yet again. First markets must endure a rare few months of chilly discipline."

This is a more sensible perspective. We're at a point now where the market is high enough for additional volatility to occur – perhaps regularly. Marts are beginning to make higher highs, not just to recover previous highs.

But let's take a step back and survey the economic and investment scene from a wider perspective. From our point of view, anyway, these markets are not in the least bit sensible, nor are reactions to the kinds of non-statements that the Fed is issuing.

Remember, please, that the data the Fed is studying is probably "cooked." It's government data with an optimistic bias that minimizes price inflation and boosts employment. We're asked to believe that the Fed can come to proper conclusions using such questionable date points.

So to summarize, the Fed issues a statement that indicates it MIGHT at some point do something to hike rates in the future – and it generates this conclusion via inaccurate government data. Nonetheless, torrents of newsprint treat proffered conclusions as a series of commandments from on high.

Our term is "directed history." Conclusions proffered are ones that the Western elites broadcast to justify what's taking place. Really, one ought to look at underlying trends, not at "reasons" provided by the mainstream media.

We return to our VESTS system. Our analysis seeks to determine what the leaders of the Western central banking community are trying to do – and then seeks to figure out whether these plans can be implemented.

We've already determined the meme at play – the Wall Street Party – and thus we believe marts may be going higher, certainly US markets. The top men have shifted around regulations and dropped interest rates to nearly zero.

What ought to be the conclusion to all of this? In the shorter term, for however long that happens to be, stocks will retain some zip. In the longer term, we foresee a terrible asset deflation on the heels of the current inflation.

The trick is getting from here to there. And pulling profits in the process. Try to determine underlying motivations and keep in mind these are manipulated markets in terms of many key parameters. Even central banking itself is a manipulation.

So … try to figure out what the monetary manipulators have in mind. And then determine as best you can whether or not their policies will "stick."

This is probably a better way of evaluating markets than using the oracular non-statements offered to the general public by central bankers as "analyzed" by the mainstream media.

Trust in your own analyses. And maybe pay attention to VESTS.