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The Dying Market
Published : April 27th, 2012
1057 words - Reading time : 2 - 4 minutes
( 4 votes, 4.8/5 ) Print article
 
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A recurring theme of mine – particularly since “D-DAY,” i.e. November 9, 2010 – has been the complete takeover of U.S. financial markets by the government. Not that they tell you thus, but the evidence could not be more abundant or telling. I make this point to emphasize the eminent danger of “investing” in a market not only rigged by malicious ALGORITHMS, but completely devoid of human representation. This is particularly true in the PM mining shares, which not only have seen reduced volume via the general trend of reduced equity investment, but have been specifically “marked for death” by the gold Cartel.

 

Since I have discussed the latter theme incessantly, I will not do so here. Instead, I want to bring to your attention two fantastic articles about the “death” of the U.S. equity markets, the first citing specific, technical “PROOFS” of the phenomenon…

 

Why The Market Is Slowly Dying

 

…such as the 50% decline in trading volume over the past two to three years…

 

24hGold - The Dying Market

 

…and the 80% decline in average trade size, care of HFT (High Frequency Trading) ALGORITHMS that primarily operate in 100 share blocks…

 

24hGold - The Dying Market

 

And next, a “layman’s explanation” of why the market is dying, care of analyst extraordinaire Bill Holter:

 

Volume speaks louder than words – Bill Holter

 

To all; in an interesting story http://www.bloomberg.com/news/2012-04-13/trad...test-trade.html the “locals” (local traders) walked out of the Eurodollar pit in protest of non other than manipluation and the cessation of the rule of law. Even after the protest, a CME spokesman said and I quote from the article “The block trade in question was managed by longstanding rules and processes of our exchanges,” Michael Shore, a CME Group spokesman, said in an e-mail. “It was a legitimate, well-managed trade, which was executed within one tick of the market and in one trade.” In brief “street speak”, what he said was this, “the trade was pre arranged and only broke the law by one tick, it’s been done for years, what’s the big deal?”

 

I bring this to your attention because “manipulation” of every market on the planet has been alleged for years by myself and many other “conspiratorial nuts” that came to the same conclusion through common street sense. In this instance, we have traders who work on the floor and have witnessed and experienced (read FLEECED) the manipulation and illegal activity and apparently had had enough. While reading the brief article it struck me like an obvious 2 by 4 smack in the head, “volume has dropped because the Fed has locked rates down at zero %.” Of course, Eurodollars won’t move if the central bank locks down rates, people get bored and move elsewhere so volume drops, THIS is not the drop in volume that hit me over the head. Volume on the day naturally dropped because local traders walked out in protest and refused to be fleeced.

 

Do you see where I am going? Trading in the equity markets has been pathetic for over a year now and continues to decline. My thoughts on this subject had been all over the place. Volume was declining because the economy was and had slowed which was not generating enough cash flow to enter the market. Debt levels were atrocious and syphoned capital to service debt that otherwise would have made its way to the equity markets. Another thought was that the outflow from mutual funds was the result of the poor economy and debt loads, so the little guy was pulling out of the market by necessity. All of these probably true to some extent. But here is where I was shortsighted, maybe the lack of volume is because the average person understands, no, KNOWS that the whole game is rigged? Maybe the average person is “taking their ball and going home”? Maybe they have had enough? Not everyone of course but “on the margin”, and it is this “margin” that counts the most. It will surely count the most if this “margin” is expanding, it will count if more and more people become more and more “disillusioned” (enlightened?).

 

Switching gears on the same path, I for one would love to see the volumes traded in the COMEX Silver and Gold pits dry up like a south Texas creek in August. If people would just not try for the leveraged home run by using levered contracts and instead just paid cash and …only carried 10% of the real deal away from the alleged inventory, we would see immediate results! Paper markets can and have always been manipulated for huge percentages, more so now than in the old days because of the use of leverage. Cash markets however are different. You pay your money and carry the product. Not that these can’t be nickel and dimed but not to the extent as purely paper markets. If investors would just plow their cash into physical product and take power away from the hucksters at the COMEX, the current charade of low prices and plenty of inventory would be exposed. This by the way WILL eventually happen, it has already happened to some extent on the margin. You can be a part of this expanding margin and help or you can be a part of “their” margin and continue to be fleeced. Take delivery!

 

The primary reason I write these missives is to help PROTECT you from the ongoing GLOBAL ECONOMIC COLLAPSE that will NOT stop until the system melts down and “reboots” with new leaders, a gold-backed currency, and regulations that will NEVER let such abuses occur again – at least not in our lifetimes. Until then, the world will still be run by vicious sociopaths with unlimited checkbooks of PRINTED MONEY and governments and regulators in their pocket.

 

If you play in their unregulated casino, you will LOSE, just as millions have done so in the past decade in stocks – particularly PM miners – as well as corporate, municipal, and sovereign bonds, and real estate. I was a professional equity analyst for 15 years, and until last year held most or all of my assets in stocks. However, due to “THE DYING MARKET,” I sold my last share last summer, never to return. I now sleep better than ever knowing my PHYSICAL gold and silver are the only assets the Cartel CANNOT steal from me.

 

 

 

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Ranting Andy

Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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