Quote of the Day: The Biggest Insider Trading Perpetrator

We put in a good citizen call to the SEC yesterday.

“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.

“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.

“Oh, don’t worry about that. The NSA is tapping our call anyway.”

“Are you talking about a specific stock?”

“Oh no… I’m talking about all of them.”

“You mean a Madoff-style scandal?”

“No… no… This is much, much bigger than the Madoff scandal. We’re talking major manipulation. Intentional. Knowledge aforethought. Pumping up all stock prices. Trillions of dollars.”

“Who is doing this?” the agent asked… a certain tone creeping into his voice. He was starting to suspect he had a lunatic on the line.

“The Fed, of course.”

“Uh… thank you…”

“You gotta go after those bastards…”

“Uh… yes… we’ll look into it…”

“Okay… thanks… I just thought you should know.”

...

Without Fed support, the economy would probably be in recession. US GDP went up about $350 billion last year. The Fed offset it with $1.2 trillion worth of QE. Even so, the economy only limps along. Without it, the economy slumps. The Fed can’t tolerate a slump. So, it has to continue with QE.

Meanwhile, the federal government is absorbing $400 billion less capital this year than last as a result of lower budget deficits. This leaves a lot of excess stray kittens in need of adoption. Who will take them in?

Stocks! Real estate! Yes, dear reader, we will most likely see more gains in 2014.

This is blatant manipulation of the markets. The Fed is open about it. Even proud of it.

This is from Bill Bonner writing at the Bonner & Partners