Define Free Markets: Central Bankers' Dim Outlook Revealed

Central Banks Define Free Markets

Updated March 2023

Central Bankers Manipulating Markets & Recreating reality

Central bankers have been actively employing psychological strategies to deceive the masses for generations; we will discuss this in more depth in a follow-up article. In essence, central banks have recreated reality, and the sad part is that the masses now assume that this altered reality is the new norm. We are going to Psychological Manipulation by highlighting excerpts from several past market updates. These excerpts should help shed some light on how central bankers very efficiently use this simple but highly effective strategy to recreate reality. A lie is only a lie if you discover you are being lied to; until that moment most actually assume that they are being told the truth.

When you control the bad and the good news, you control the outcome of the game. How high will this market soar? Well to issue very long-term targets would be a waste of time as the situation is very fluid; meaning that this market will go as high as the masses allow it to go. Market Update May 17, 2015

When you think logically or use old parameters to gauge this market, every bone in your body probably screams out that this market should crash and burn. That is true, but it is also true that as nothing is real, logic has no place in the illusory. How can you use logic (which is based on using real and compelling data) to judge an event that is illusory? Every statistic imaginable has been, is being or will be manipulated to satisfy whatever picture the manipulators want the masses to believe in.

It takes two to tango, one to cry and three to have a party.

Are Central Bankers Manipulating Markets? The answer is a loud “yes”

Thus the crowd is as complicit in this game as are the manipulators. The most likely outcome is that the markets will trade higher than anyone expects as long as the trend remains up. We also feel that the Dow will experience at least one 10% correction (plus or minus 2%-5% ) before it attempts to challenge the 19,000 ranges.

The 10% correction will have the bears growling with satisfaction as they finally feel vindicated and instead of banking their gains, they will open up more shorts and watch the small profits they finally locked in vaporising and add to their already significant losses. On that note, we have evaluated the situation in Ukraine, and we feel that for the risk-averse, buying properly in Kyiv and or one of the large cities makes for a great long-term investment. Every disaster is nothing but opportunity saying “Hello”, most slam the door and run, instead of responding in kind.

This What We Have Discerned over the years ;

There will always be room for another massive disaster.
Stress is the most destructive force in the universe (at least as far as living things are concerned). Therefore, if you are part of the living dead then this probably does not apply to you.
The best and most effective trigger for stress is the fear of the unknown. 99% of humans know nothing that could be termed as relevant, and or the little that they know is more destructive than useful. Most humans selectively choose their stress (poison); if you can selectively choose your poison, you can then also choose not to ingest any more of it. Hence, the disease and the cure lie within your hands. Do something about it or someone else will, and the outcome will not be the one you wish, want, or hoped for.
There will always be fear mongers warning you that the end of the world is nigh (so far their record is dismal for the world has not ended). Your best option is to view their dire warnings in the same light as the ravings of a lunatic.
There will always be people who say I wish I bought when the markets were falling apart, but when that situation finally presents itself, these very same people will be the first to head for the exit.
Ironically, people worry about dying, instead of focusing on how to make each moment of this finite life more memorable. Dead men tell no tales because the living are much better at it.

Central Bankers Manipulating Markets Via Psychological Warfare

The focus is on altering the perception. Once the perception is altered it does not matter what the reality is for a new alternate reality has been created. This alternate reality will replace reality and remain valid until the masses manage to break free from its hold. For months now the Fed has been giving hints that it was going to taper off its $85 billion a month program, but when the markets reacted badly, it always backed off. However, this time, the markets are holding up fairly well; it appears that they have priced in the fact that the Fed is going to start looking for a way to cut back on this program. In this sense, the markets are holding up rather well, and one would have to say that they are now actually climbing a wall of worry. Market Update Dec 12, 2013

The perception is changing; the masses are now becoming optimistic thus, unless the trend changes we can expect the markets to rally even higher. Another thing to understand is that even though the rally in the markets has been artificially induced, the markets have recently issued “a true bullish signal.”. What is this signal you ask? Well, both the Dow and SPX are trading at new highs. A true bull market is not in session until the old highs have been taken out. 9 out of 10 times when this occurs the market rallies significantly from the breakout point; the breakout point, in this case, is roughly 14200 (the old 2008 high). Market Update Dec 12, 2013

Psychological warfare the new tool to Define Free Markets. Under the guise of normalising things, the Fed is resetting the definition of free markets. Silently they are killing all the natural forces and rob the poor to feed the rich through their blatant manipulation of the interest rate.

Perception Is Everything: Reality Is Just Another Illusion

Define Free Markets? that is an interesting question and the answer is that in many cases it depends on one’s perceptions. Alter the individual’s perception, and you can recreate reality and provide them with an alternate reality. The market breakout to new highs was a bullish signal, and this was not an easy call to make given the volume of negative comments originating from so-called financial experts. The Fed has been paying close attention to this experiment, and the results are excellent. Hence, we don’t expect the Feds to abandon these Brainwashing experiments. Why would they? The results are simply fantastic. There will be no need for reality TV anymore or to watch series like the living dead, for many of today’s individuals act almost exactly like the zombies in that series.

The Fed is going to redefine the definition of inflation

The Fed’s actions Define Free Markets, and this insane action to flood the system with liquidity to prevent free forces from cleansing the markets indicates that, eventually, free-market forces will virtually cease to exist. And such blatant action from the Feds will push people away from questioning the validity of Fiat. In fact, Bitcoin is their latest experiment, and it has worked out fantastically. It has soared in value 100X faster than Gold was ever able to achieve. The masses are chasing worthless computer bits and assigning a tremendous value to it; these chaps will never abandon FIAT, and that’s precisely what the Fed wants. Welcome to my World said the spider to the fly, to which the fly responded, which one.

The new reality is that the mum and pop investors have just jumped into the market, and they have been sitting on the sidelines for a very long time. They have also been finally brainwashed into accepting the alternate reality that all is well. On that basis, we can expect the markets to rally much higher before they finally run into a brick wall. Market Update Dec 12, 2013

Central Bankers Manipulating Markets: How To Deal With It?

While one could view these developments as something terrible, the truth is that trying to help the masses is an exercise in futility that always pays off poorly. A good Samaritan is usually a dead one, and Heroes die young. The groups have one purpose, and it goes by the name of “cannon fodder“. If you are willing to look at this from the observer’s perspective, then you can ride on the coattails of these bandits and lock in impressive gains along the way. The phrase “don’t fight the Fed was not coined for no reason”. The Fed’s action of flooding the system with money is going to define free markets for years to come. The term free markets will no longer carry the same meaning as it used to before the 2008 financial crisis.

Define Free Markets: Conclusion

The data suggest that central banks, through their actions and policies, are increasingly defining what constitutes a “free market.” By manipulating interest rates, quantitative easing, and other tools at their disposal, central banks are distorting market forces and signals. This interventionism has become the new normal, reshaping investors’ perceptions of value and risk.

Central banks are employing psychological strategies to shape market expectations and sentiment. By controlling the narrative and altering perceptions, central banks can effectively “recreate reality” in the eyes of investors. This new reality, fueled by central bank liquidity and intervention, has pushed asset prices to levels that may not be justified by fundamentals.

While central bank actions have fueled market rallies and gains for some investors, there are concerns about the long-term effects of distorted market signals and the erosion of true free market forces. A market propped up by artificial stimulus may be set up for a sharp correction once interventions are removed.

However, as the data notes, trying to fight central bank policies directly is often futile. A more effective strategy may be to observe the market from the sidelines and ride the coattails of the rally, exiting positions before the distortions become unsustainable.

In summary, central banks have become the dominant force defining what a “free market” means in practice today. Whether this new normal will prove sustainable long-term remains to be seen. But for now, central bank policies and interventions are warping market forces and distorting investors’ perceptions of value and risk.

The original Define Free Markets article was Extracted from the May 31, 2015, Market Update, repeatedly updated over the years: latest update March 2023