EDITORIAL
As Predicted, Stocks Make New Highs
By Anthony Wile - March 22, 2014

The sky is falling. The seas are rising. The ground shakes. The very fabric of space and time trembles.

And stocks go up.

This is called "The Wall Street Party." The power elite that in aggregate organizes central banking policy and is responsible for foreign policy also supports a continuation of a positive climate for equities.

The stock market is supposed to travel up until it can no longer fly higher. But that may not be today or even tomorrow.

First, the market will have to discharge its many "green" issues, the ones we have reported on that clog the IPO channel. This is most important, as the top elites want to ensure that these companies are credibly funded with "public money."

The meme must continue, after all. The mainstream media must report enthusiastically about electric car companies making combustible batteries, windmill companies erecting products that make people sick from all the noise, solar panels that are defective rather than cost-effective.

The idea is to drive the market up until the easy money has been suckered and every Mom and Pop has once more committed funds to fuel the fantasy …

And then pull the plug. The resultant ruin, it is hoped, will create fertile ground for a more globalist financial environment, including perhaps a new kind of international currency and even the erection of a global central bank.

Some people will make a killing as this scenario unfolds because in the near term it seems likely that stocks will continue to climb the proverbial "wall of worry."

In the end this phony market has only one way to travel. But not yet, and probably not for a while. Against all odds, or so we will be told, the stock market will reach 18,000, 20,000 or even more. It is well on its way.

Businessweek, too, reminded us yesterday that U.S. stocks continue to make new highs.

Stocks fell after the Standard & Poor's 500 Index climbed to a record, while Treasuries gained and the dollar weakened.

This kind of price activity baffles the brain and beggars the senses. But we are not supposed to understand the vagaries of high finance. It's easy to believe, in any case, that stocks should fall right away.

But, nonetheless, the Big Bull is intact. The business environment is "strong." Here's more:

The S&P 500 fell 0.3 percent to 1,866.40 at 4 p.m. in New York, after reaching an all-time high of 1,883.97. The yield on 10-year Treasuries fell for the first time in three days, losing three basis points to 2.74 percent. The MSCI Emerging Markets Index gained 0.4 percent as Hong Kong's Hang Seng China Enterprises Index (HSCEI) climbed 2.4 percent after entering a bear market yesterday.

U.S. stock trading was subject to swings today because of quadruple witching, when futures and options contracts on indexes and individual stocks expire. The S&P 500 advanced 1.4 percent this week as better-than-estimated economic data overshadowed concern that benchmark interest rates may rise in the middle of next year.

… The S&P 500 erased gains today after reaching levels it has repeatedly failed to surpass this month. Before today, its previous intraday high was 1,883.57, reached March 7, and the gauge touched 1,881.94 on March 6 and 1,882.35 on March 11. The index has climbed 0.4 percent for March, and is up 1 percent for the quarter.

The benchmark gauge rose 0.6 percent yesterday as reports on leading indicators and regional manufacturing topped forecasts. Reports on housing, gross domestic product and durable goods are among the economic data due next week.

Three rounds of Fed stimulus and low interest rates have helped boost the equity gauge as much as 178 percent from a 12-year low as U.S. stocks enter the sixth year of a bull market. Policy makers met this week as economic reports indicated the economy is pulling out of a slowdown linked to unusually harsh winter weather.

"The consensus believes that the stock market will continue moving higher as long as the economy improves," Matt Maley, an equity strategist with Miller Tabak & Co., said in a phone interview from Boston.

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Of course, the economy is not really improving, but hush, child, we're not supposed to realize that. It might have been thought that tension over the Ukraine and even the prospect of outright war between the West and Russia would derail equities. But – surprise! – such was not the case, or not yet.

In fact, Germany's Angela Merkel herself went out of her way to discourage such talk. Bloomberg reported yesterday that Merkel had declared "21st century rules" precluded a return to the 20th century's Cold War:

Merkel Says Cold War Over as 21st Century Rules Take Precedence … German Chancellor Angela Merkel said she's moved on from the Cold War as she upbraided Russia for refusing to play by 21st-century diplomatic rules.

Merkel, the country's first chancellor from the former Communist East Germany, speaks Russian and has telephoned with President Vladimir Putin regularly since Russia moved to seize Crimea to urge him to back down.

"Fortunately, I like the rest of us have been able to leave the Cold War behind me," Merkel told reporters in Brussels today when asked about her view of a renewal of the east-west divide. "I also think that history doesn't easily repeat itself."

… Merkel called on Putin's government to return to the international fold. She reiterated her stance that "methods of the 19th and 20th centuries certainly can't successfully resolve the conflicts of the 21st century."

So … after so many mainstream articles grimly predicting the possibility of a larger war, and even breathlessly whispering about potential "nuclear" confrontation, we discover that Frau Merkel, like Barack Obama, has no intention of fighting Vladimir Putin over Crimea or even Ukraine.

Eastern European countries take note: As Merkel explains, "the conflicts of the 21st century" will not yield up a Third World War. Or not yet anyway.

Welcome to the manufactured marketplace, one driven by low interest rates and high volumes of money printing.

  • There is no recovery to be seen in Britain, nor in Europe, nor in the US despite rosy forecasts.
  • Chinese officials, for the umpteenth time, are plotting a "soft landing" for their perfervid economy.
  • Japan's stimulus-jolted economy is defaulting to its preferred comatose condition.
  • Russia, the EU and the US are threatening further sanctions.
  • India and Brazil are vainly trying to damp vicious surges of price inflation …

And the US stock market goes up. The US borrows and borrows and the Fed continues to print, along with every other major central bank in the world. The BIS presides over the greatest fraud since, well … the last great recovery that traveled from 2002 to 2008.

That one ended badly, as well. But not until many became rich and some – those who were able to gauge the market's arc – managed to keep all or part of their gains.

It is indeed a fantasy … and a fraud … but it is also a reality unfolding before our unbelieving eyes.

We are wafted upwards on the wings of fiat money printing.

Our destination, like Icarus's, is the Sun.

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