Fear and Greed; main reasons most investors to lose money in the Stock Market

Posted on February 7, 2021 by Alan Solomon

Stock Market Fear and Greed are the primary driving force behind all markets

Stock Market Investing is all about not allowing one’s emotions to do the Talking; once your emotions start talking your money starts walking away from you. The financial crisis of 2008 scarred many individuals and scared away even more; add in the Great Recession, and one can see that the average Joe can come up with many reasons to avoid the stock market. However simple market sentiment analysis could have saved many a person from losing a significant portion of their wealth. To make matters worse, the unemployment rate remains stubbornly high, and wages in most instances are dropping instead of rising which means that many Americans have little to no disposable income left after expenses. Don’t for one second believe the twisted statistics issued by the BLS (Bureau of labour department); those statistics are on par with toilet paper.

Most individuals assume that they need a lot of money to invest in the markets

Stock Market Fear: Individuals making $30,000 or less per year are more likely to avoid the stock market, citing insufficient funds as one of the main reasons. There appears to be a misconception in thinking that one needs a lot of money to invest in the markets. Nothing could be further from the truth. One can start off with small amounts and slowly add to this base over the years.; the power of compounding is amazing. If you start young enough even putting away $50-$100 a month can add up to a sizable bundle by the time you retire.

The average person thinks that investing in the markets is very risky

This is just another misconception that has grown especially after the devastating crisis of 2008. If one is investing for the long haul and in quality stocks, then investing is one of the surest ways of making money and building a sustainable nest egg. However, one needs to understand what one is getting into and not plunge into the markets blindly as is the case with most individuals.

People assume that investing is hard to learn or master

We are referring to financial education and not higher education from institutes such as colleges or universities. We would even go as far as to suggest what these institutes teach regarding the stock market is useless. As with everything in life, if one wants to master a new skill, one needs to set some time aside for this endeavour. If you are going to talk the talk, then be ready to walk the walk. Don’t expect some expert to guide you to the promised land, for you will find that instead of finding paradise you are more likely to be welcomed into Hell.

https://www.youtube.com/watch?v=xkf44QK7Tng

Regarding the stock markets it would be wise to look at the history of the markets; study past stock market crashes; the events that lead to the crash and events that set the foundation for the next bull run. Then paper trade before deploying your hard earned cash?

If you are going to rely on a financial advisor; how are you going to know if he is not selling you sack of sawdust if you know next to nothing. In most cases people set themselves up to lose in the markets or to be taken advantage of; it takes two to tango. Surveys done by bank rate shows that Millennials were twice as likely as any other group to cite lack of financial knowledge as their main reason for avoiding the markets. If this trend persists, they are going to be ten times more likely to ask the government for handouts when they retire.

Most Investors Distrust the Financial Markets

Yes, one could say there is a valid reason to fear the markets as many Millennials have grown up in an era of financial disasters; two of the most painful ones were the dot.com bubble and the Financial Crisis of 2008, which later came to be known as the Great Recession. However, again, lack of financial knowledge and the wrong perspective is what provides the foundation for this fear. Fear is a useless emotion when it comes to the stock markets; the best time to buy is when blood is flowing freely; translation, so-called disasters always provide opportunities for the astute investor. Additionally, one could have easily sidestepped both disasters by paying attention to market sentiment; in both instances the masses were euphoric, and they thought the bull market could last forever. Nothing lasts forever and when the masses are ecstatic it is time to leave the party. Disaster can be viewed as an opportunity or as a tragedy; it all comes down to one’s perspective. Alter the angle of observance and the perspective changes.

The Concept of retirement planning is nonexistent for many

Bankrate states that only 25% of Americans check their investments and retirement accounts more than once a month. These same individuals can spend countless of hours on their phones texting each other or on Facebook or otherwise known as Face Crack. One does not need to look at one’s investments every day, however, spending time on finding out what’s trending or where the crowd is leaning could make the difference between banking your profits or trying to catch a falling dagger.

Ideally, individuals should have a rough idea of how much they would like to have by the time they retire and then come out with a feasible plan. Otherwise, they are bound to come up with some harebrained scheme that is fuelled by fear when they suddenly realise that the years have passed away, but the account is looking as miserable as it did on the day of its inception.

Fear and Greed drive the masses; they are Euphoric before a market crashes and panic close to market bottoms

Disaster is usually opportunity knocking in disguise, instead of running, stop and give it a massive a hug. The chart below clearly indicates that stock market crashes and other negative financial events are nothing but mouthwatering long-term buying opportunities.

The financial world often refers to black Monday (the crash of 1987) when they want to ratchet up the fear factor; on a long-term chart, it is just another blip that more aptly represents an opportunity rather than a disaster. In every instance before the market pulled back firmly, the sentiment was extremely bullish; in other words, the crowd was euphoric. If you used just followed the emotion you would have managed to avoid almost every disaster and this dates back to the tulip bubble. We are not talking about timing the exact top; those that try to time the exact top usually have plenty of time on their hand and an enormous appetite for pain.

For the masses, sharp pullbacks feel like a crash because they have the uncanny ability to buy exactly at the wrong time; they buy high and sell low. We will examine the concept of opportunity being masked as a disaster in a future article.

How Fear and Greed to your advantage

The word disaster represents an opportunity for the astute investor. It is only the uneducated investor that views a market pullback through a negative lens, and this is usually done because they have not taken the time to study the markets. One would be well served if one spent some time in examining the history of stock market crashes and what was taking place before the markets crashed. In every instance, one will find out that the crowd was bullish and every Tom, Dick and Harry was busy giving out financial advice. When the crowd is happy, you should leave the party.

Spending a little time on history and market psychology could prove to be priceless. If you take the time to do this, you will have a better understanding of the markets than most so-called financial experts. The phrase “knowledge is power” was not coined for no reason, but there is a difference between knowledge and rubbish. When it comes to the stock markets, most of the stuff that is marketed as valuable is nothing but garbage and in many cases what the experts make fun of is what you should be paying attention to.

For instance, market sentiment is far from bullish even though the stock market is trading close to its highs. Hence, all sharp pullbacks have to be viewed as buying opportunities. When the crowd embraces this bull market, it will be time to leave the party.

Articles Of Interest

What is quantitative easing?
The Boom And Bust Cycle: Fiat
Long Term Trends: stock market bull vs bear
Stock Market Correction
Bearish vs Bullish outlook: The Trend favours higher Market prices

Why Most Investors lose Money in the Stock Market?

Posted on February 6, 2021 by Alberto Mancini

Jesus said, “ Recognize what is in your sight, and that which is hidden from you will become plain to you. For there is nothing hidden which will not become manifest.”

The Gospel of Thomas vs 5 ( from The Nag Hammadi Library )

Information overload and the Stock Market Game

Stock Market Game: Under the guise of being “well informed”, the Age of Communication races toward the time when information is instantaneously available via a modem and brain interface made of nonmaterial’s and implanted at birth. Hello, the ultimate cyber-geek. However, there is no proof that more information helps the majority to be any happier, compassionate, or give us a few more nanoseconds of leisure. Information overload is one of the reasons most Investors lose Money in the Stock Market; they don’t know how to separate the riff from the raff. At the end of the day, investing is nothing but a stock market game; understand the rules and win or vice versa.

Most of the information on the Internet is Tainted

If unable to evaluate information, or realise that all information is tainted with someone else’s values, its values become part of you, just like viral code being entwined in our own cell’s machinery – or computer code – or belief sets.

Our parents first mould These belief sets. It was then the role of religious institutions and schools to develop our “internal software”, but now we are in a time when most are weaned onto the boob tube. At school, we have teachers who were themselves nurtured on “the boob tube”. Take this principle one step further and apply it to the markets and you can see Most Smart Investors don’t lose money in the Stock Market. They don’t allow the values of these so-called experts to become part of them and then they start to think like these experts. Most of these experts are nothing but shills selling false information they would never use themselves.

Television destroys an individual’s ability to Imagine or think out of the box

With television, imagination is not needed for entertainment, and information of many types comes “plain wrapped” with no need to discriminate between reality and fiction, the useful or useless. Just 15 minutes of watching cartoons a day kill a child’s creativity.

There are many reasons that have been advanced as to why traders fail. My own experiences with educating traders are that:

thinking without discrimination
skimming information without understanding
impatience with the expectation of quick gratification

The above three factors are major contributors to poor results.

Just as burning the bra didn’t help women’s liberation, smashing the boob tube is not going to change the way you think.

We must abandon ourselves to uncertainty and not cling to anything because it appears to be the answer. It is when we are prepared to look at multiple possibilities that we have the option to identify and follow The Truth.

By abandoning incorrect beliefs and certainty, we can follow The Truth. Strange but True. Beliefs that are forged in the fires of doubt can survive the light of reality. All other beliefs remain untested. Will they survive? Will you survive?

Additional Insights to playing the Stock Market Game

Most investors are not aware of Fiat and the dangers it poses. If you understand that Fiat only exists because the masses have been conned into believing it’s real money, then you will understand that all financial disasters are planned and that there will always be a solution. Why? Money is created out of thin air; hence, central bankers can create as much money as they want to rescue the financial system from the disaster they created. Each disaster creates a new breed of poor and makes the rich even richer.

Understand the simple law of Paradoxes; it will help keep you on the right side of the markets

Understanding the law of Paradoxes could help you in many aspects of your life, especially in the financial arena. The stock market is full of snake oil salesman, all trying to sell you a different take but most of these experts don’t put a penny into what they are marketing. They make their money by selling you junk that they would never touch.

Grasp the simple concepts that fall under the field of Mass Psychology & win the investing Game

Mass psychology states that one should never abandon the carriage until it’s about to buckle under its own weight. If you apply this principle to the markets; it boils down to buying when the masses panic (or there is blood in the streets) and selling when the masses are jumping up in Joy. While you are at it, master the simple principles of being a contrarian investor.

Information overkills creates a breed of dumb investors

The video aptly covers this topic and highlights the dangers of information overkill

Published courtesy of the Tactical Investor

Central Banks Stock Market Rigging Driving stocks to new highs

Posted on February 4, 2021 by Alberto Mancini

Here’s how Central Bankers Rig the Markets

Central Banks Stock Market: Central bankers utilise fiat money to rain misery and pain on the unknowing masses. They no longer take from Peter and give to Paul, they make sure that Peter and Paul try to rob each other and everyone else to survive. They control the game, and you are just a pawn in this game. The only day the outcome will change, is when the Fed is eliminated from the equation. Many Great presidents and leaders warned of this day of reckoning but as usual, nobody listened, and it’s time to pay the Piper now.

Brian Rich, of Forbes, seems to agree wholeheartedly; this paragraph succulently summarizes his views.

Stocks continue to surge; stock market volatility continues to sit at ten–year (pre–crisis) lows. The interest rate market is much higher than it was before the election but now quiet and stable. Gold, the fear–of–the–unknown trade, is relatively quiet. This all looks very much like a world that believes a real economic expansion is underway, and that a long–term sustainable global economic recovery has supplanted the shaky post-crisis (central bank–driven) recovery that was teetering back toward recession.

The Fed is on course to eliminate the middle Class in the United States and create a new generation of slaves. In fact, it has already destroyed a significant portion of this group.

According to article published on CNN, 6 in 10 American’s don’t even have $500 in savings

Nearly six in 10 Americans don’t have enough savings to cover a $500 or $1,000 unplanned expense, according to a new report from Bankrate.

Only 41% of adults reported having enough in their savings account to cover a surprise bill of this magnitude. A little more than 20% said they would put it on a credit card, the report said, while 20% would cut their spending and 11% would turn to friends and family for financial assistance.

“This is a persistent American problem of how you should handle your finances and spending,” said Jill Cornfield, retirement analyst for Bankrate. Full Story

Another survey finds that nearly 7 in 10 Americans have $1000 or less in their savings accounts. GoBanking surveyed 7,000 people and found that 34 percent of the respondents had $0 set aside.

The current stock market bull is based on hot money; had the fed not injected trillions of dollars into the system, there would be no stock market bull or the so-called economic recovery.

These Quotes illustrate the Fed’s Nefarious Agenda

“The few who understand the system will either be so interested from its profits or so dependent on its favours, that there will be no opposition from that class.” — Rothschild Brothers of London, 1863

“Give me control of a nation’s money, and I care not who makes its laws.”– Mayer Amschel Bauer Rothschild

Great leaders have gone out of their way to try and educate the masses, but the masses have no interest in learning from history so will be doomed to repeat the mistakes of their ancestors; the price for this stupidity rises with the passage of each day. Each generation pays a higher and higher price for their lack of foresight and preparedness. These shadowy players rely on the fact that the masses are ignorant regarding what real money is. They control the education system and so ensure that from day one you learn what they want you to learn. The only way to break out is to start educating yourself.

“Most Americans have no real understanding of the operation of the international moneylenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States.” — Sen. Barry Goldwater

“Whoever controls the volume of money in any country is the absolute master of all industry and commerce.” — James A. Garfield, President of the United States

“To expose a 15 Trillion dollar ripoff of the American people by the stockholders of the 1000 largest corporations over the last 100 years will be a tall order of business.” — Buckminster Fuller

“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford

“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it.” Congressman Louis T. McFadden in 1932

“Some people think the Federal Reserve Banks are the United States government’s institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers.” — Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

“As soon as Mr Roosevelt took office, the Federal Reserve began to buy government securities at the rate of ten million dollars a week for ten weeks, and created one hundred million dollars in new currency, which alleviated the critical famine of money and credit, and the factories started hiring people again.” — Eustace Mullins

Suggested Strategy

Manipulation is the order of the day, and one can see this in every aspect of one’s life. This trend will continue to gather steam, and it will only end when the masses revolt. The masses are notorious for responding very slowly, so we can assume that by the time they snap out of their comatose, the markets will be trading at unimaginable levels. Tactical Investor April 2016

Well, the markets have soared significantly higher as expected and corporate debt continues to rise. Corporations are plugging money into share buybacks as this is the easiest way to create the illusion that EPS is rising. It is a win-win game; corporate director’s reward is based on performance. As long as they can create the illusion that earnings are improving their paychecks continue to increase.

One other powerful tool that investors can employ is to pay close attention to mass sentiment. When the masses are nervous, the markets will continue to trend higher. That’s why this bull market is often referred to as one of the most hated bull markets of history. Despite all odds, it has trended higher, and we predicted this would happen as mass sentiment was and is still somewhat negative. Until the masses embrace this crazy bull market, the path of least resistance appears to be in the upward direction.

We expect corporate debt to trade at levels that will make today’s insane levels appear sane one day. As long as Fiat is in play; every major pullback/correction has to be viewed as a buying opportunity. The markets will continue to be manipulated probably until the end of time or until Fiat is eliminated from the equation Therefore until the trend changes, every substantial pullback should be viewed through a bullish lens.

Published courtesy of the Tactical Investor

Wells Fargo exec was fired for not scamming N.J. customers

Posted on February 3, 2021 by Alberto Mancini

Wells Fargo: A Somerset County woman is suing Wells Fargo Bank alleging she was fired for refusing to participate in an alleged scheme similar to the bank’s widespread account scam that led to millions of dollars in federal fines.
Melinda Bini, a former assistant vice president and regional private banker at the Highland Park bank’s branch, says in a recent lawsuit that supervisors instructed her to manipulate accounts and sell banking products or investments that were not the customers’ best interest or without their knowledge.

The lawsuit, filed in Middlesex County Superior Court on April 5, names Wells Fargo and three local bank supervisors.

The Franklin Park woman accuses her former superiors in the suit of running or knowing about alleged banking and investment fraud scheme at the local branch.
A spokesman for Wells Fargo, Kevin Friedlander, said the three supervisors named in the lawsuit are still employed by the bank, but did not comment on the allegations.

“Since this is an ongoing legal matter, we are unable to comment any further on the lawsuit,” Friedlander said in an emailed statement.

Bini, who is a licensed financial advisor hired by the bank in 2002, refused to participate the “unlawful and unethical banking” and was harassed in retaliation, according to the suit.

In April 2016, Bini was fired, a move she said was manufactured by her supervisors for not joining the alleged scheme, according to the suit. Full Story

A New Jersey woman has sued Wells Fargo Bank, saying she was fired for refusing to participate in a scheme to manipulate accounts and sell products that weren’t in customers’ best interest.

Melinda Bini filed a lawsuit in state court in New Jersey on April 5 against the bank and three supervisors from the branch she worked at in Highland Park, NJ.com reported.

In the lawsuit, Bini accused her superiors of running or knowing about the scheme and says she was retaliated against and later fired for refusing to participate. Bini, a former assistant vice president and regional private banker, is seeking her job back and damages.

In September, San Francisco-based Wells Fargo & Co. agreed to a $185-million settlement with Los Angeles City Atty. Mike Feuer, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency after employees were found to have created as many as 2 million checking, savings and other accounts in customers’ names without those customers’ knowledge or consent.

The tactics, blamed on onerous sales goals, were first uncovered by the Los Angeles Times in 2013.

Kevin Friedlander, a spokesman for the bank, said the company doesn’t tolerate retaliation against employees who express their concerns.

“Our nonretaliation policy makes clear that no team member may be retaliated against for providing information about suspected unethical or illegal activities or possible violations of any Wells Fargo policies,” Friedlander said. Full Story

A former executive at Wells Fargo claims in a lawsuit that the bank fired her because she refused to participate in a scam like the bank’s well-publicized fake account scandal, which led to a $185 million fine after more than 5,000 of the bank’s former employees opened more than 2 million potentially unauthorized accounts to get sales bonuses.

NJ.com has the details:

Melinda Bini, a former assistant vice president and regional private banker at the Highland Park bank’s branch, says in a recent lawsuit that supervisors instructed her to manipulate accounts and sell banking products or investments that were not the customers’ best interest or without their knowledge.

The lawsuit, filed in Middlesex County Superior Court on April 5, names Wells Fargo and three local bank supervisors.

The Franklin Park woman accuses her former superiors in the suit of running or knowing about alleged banking and investment fraud scheme at the local branch.

And after Bini refused to take part in the scheme, she claims she was harassed and eventually fired in retaliation.

It should be noted that Bini’s allegations are merely allegations so far. The bank is not commenting on the lawsuit beyond saying that it “does not tolerate retaliation against team members who report their concern.”

The lawsuit is just the latest in a string of bad headlines in the wake of the fake account fiasco. Full Story

IMF: Global Economic Growth Speeds Up a Bit

Posted on January 31, 2021 by Alberto Mancini

The International Monetary Fund (IMF) says the global economic outlook is “brightening,” but warns that “protectionism” and geopolitical tensions could hurt economic growth.

The IMF published the report Tuesday, ahead of this week’s gathering of top economic officials from around the world for meetings of the World Bank and the IMF.

The IMF’s Maurice Obstfeld told journalists that global growth will probably accelerate from a 3.1 percent annual rate in 2016 to 3.6 percent in 2018. He says commodity prices have “firmed” since early last year, but at a relatively low level. That leaves commodity exporters in the Middle East, Africa and Latin America with challenges. He also says bad weather and civil unrest mean several low-income nations face mass starvation.

In the report, economists say there are many “downside risks” including political pressure to restrict trade, which they argue will hurt rather than help growth. The report’s authors say slow and unequal income growth, meager growth in productivity, the financial crisis, and other problems have generated political support for “zero-sum” approaches to trade. Obstfeld says nations that pull out of the multilateral trading system could suffer a “self-inflicted wound.”

The IMF says in many cases, wages have not kept up with rising productivity, and labor’s share of national incomes has dropped. These experts urge policymakers to do more to ensure that the gains from growth and trade are shared more widely. Full story

The IMF said on Monday it expects global growth this year of 3.5 per cent, down from 3.7 per cent in 2018 and from the 3.7 per cent it had forecast for 2019 in October.
“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” said Christine Lagarde, the IMF managing director, as she presented the new forecast at the World Economic Forum in Davos, Switzerland.
The fund left its prediction for US growth this year unchanged at 2.5 per cent – although a continuation of the partial 31-day shutdown of its federal government poses a risk. The IMF trimmed the outlook for the 19 countries that use the euro currency to 1.6 per cent from 1.8 per cent.

https://www.youtube.com/watch?v=MhrC2_Hak08

Growth in emerging-market countries is forecast to slow to 4.5 per cent from 4.6 per cent in 2018. The IMF expects the Chinese economy – the world’s second biggest – to grow 6.2 per cent this year, down from 6.6 per cent in 2018 and slowest since 1990.
The World Bank and the Organisation for Economic Cooperation and Development have also downgraded their world growth forecasts. Full Story

Indoctrination Definition

Posted on January 30, 2021 by Alan Solomon

Indoctrination Definition: Are Your Perceptions Really Yours?

To understand this topic, what indoctrination means, let’s start with a question. If two men are arguing and one guy has data to back up his stance, and the other does not have data to back up his stance but irrefutably believes his view is the right one. Who is correct and who is wrong?

The obvious answer would be to state that the guy that has the data to back his point, but if one digs deeper one would have to ask whether this data is indeed valid, has it been independently verified are the sources legit, etc. But even that does not matter, for no matter what data either individual provides to the other, they will both stick to their guns.

The right answer is that they are both right, for nothing anyone can say will move them to change their position. Welcome to the world of indoctrination. Being conservative or liberal or open-minded or closed-minded, or whatever label you want to come up, is in most cases nothing but a form of indoctrination. You think the way you do because of your parents, the school you went to, the friends you have and your religious bent and so on.

Taking things even further, one can state that the liberals are not wrong for the way they see the world because they believe in that line of thinking and the same applies to the conservatives. Alt-right and Alt-left are nothing but forms of indoctrination and the extreme right and left have just received a super dose of brainwashing.

The masses are Indoctrinated Into Believing Experts Know it all

This is the main reason we have stated over and over again, that one should not wear their emotions on their sleeves, for no good can come from it. What has made things worse today is that very few people agree to disagree and move on to a new topic. Today opposing groups want to beat their views into the other group, regardless of whether they agree or not.

This is how the trend of polarisation started. Once you start telling a group that does not agree with you, that they are wrong, that they are stupid and start calling them names, a dangerous sequence of events is triggered and nothing the other camp says or no matter what evidence is provided, the opposing camp will refuse to budge. Look around today for that is where we are and the trend is still in its infancy.

Noam Chomsky Provides A Nice Overview On the Field of Indoctrination

This is a long topic and thankfully, Noam Chomsky provides a nice overview of this subject. We will cover this topic in more detail but if you are interested in understanding more about the inner working of the mindset, then this is a topic one should familiarise themselves with and this video provides a good starting point

Random notes on other topics besides indoctrination

The idea is to incept the seeds of doubt; if you want more clarification on this topic, just watch the movie Inception. The top players have been incepting ideas into the masses for millennia; it works brilliantly and the results are highly rewarding so this process is not going to stop soon. Once the seeds are sown, it is easy to use mass media to provide this seed with a nourishing environment and from seedling, this doubt grows into a massive tree.

In the guise of trying to provide individuals with information, the medias main goal is to brainwash individuals. One of the main ploys is misdirection; this technique revolves around the ploy of creating a mountain out of a molehill to redirect the masses focus. Sadly, this technique works like a charm. The two most effective Brainwashing institutions are public schools and the mass media

Brainwashing Techniques: Using paid experts to support a false narrative

This is another technique that works like a charm and it is blatantly used in the financial sector. Expert after expert spouts an opinion and often the opinions are in direct opposition to each other. The idea is twofold, first to load you with so much information that you don’t quite remember all the details. Secondly, the idea is to cover both ends of the story and when the outcome comes to pass, they make it look like that was the main outcome they were broadcasting all along. In other words, when it comes to the markets, the experts cover both ends of the game, therefore there is no way they can lose.

However, what the masses fail to understand is that they are guessing just like the crowd is, but the only difference is that they control the media, while the people in the crowd are nothing but passive observers, waiting to be taken for a ride. Brainwashing Techniques Institutions & The Media Utilize

How Brainwashing Works

During the Korean War, Korean and Chinese captors reportedly brainwashed American POWs held in prison camps. Several prisoners ultimately confessed to waging germ warfare — which they hadn’t — and pledged allegiance to communism by the end of their captivity. At least 21 soldiers refused to come back to the United States when they were set free. It sounds impressive, but skeptics point out that it was 21 out of more than 20,000 prisoners in communist countries. Does brainwashing really work in any reliable way?

In psychology, the study of brainwashing, often referred to as thought reform, falls into the sphere of “social influence.” Social influence happens every minute of every day. It’s the collection of ways in which people can change other people’s attitudes, beliefs and behaviors. For instance, the compliance method aims to produce a change in a person’s behavior and is not concerned with his attitudes or beliefs. It’s the “Just do it” approach. Persuasion, on the other hand, aims for a change in attitude, or “Do it because it’ll make you feel good/happy/healthy/successful.” The education method (which is called the “propaganda method” when you don’t believe in what’s being taught) goes for the social-influence gold, trying to affect a change in the person’s beliefs, along the lines of “Do it because you know it’s the right thing to do.” Brainwashing is a severe form of social influence that combines all of these approaches to cause changes in someone’s way of thinking. Full Story

The True Story of Brainwashing and How It Shaped America

Journalist Edward Hunter was the first to sound the alarm. “Brain-washing Tactics Force Chinese Into Ranks of Communist Party,” blared his headline in the Miami Daily News in September 1950. In the article, and later in a book, Hunter described how Mao Zedong’s Red Army used terrifying ancient techniques to turn the Chinese people into mindless, Communist automatons. He called this hypnotic process “brainwashing,” a word-for-word translation from xi-nao, the Mandarin words for wash (xi) and brain (nao), and warned about the dangerous applications it could have. The process was meant to “change a mind radically so that its owner becomes a living puppet—a human robot—without the atrocity being visible from the outside.” It wasn’t the first time fears of Communism and mind control had seeped into the American public. In 1946 the U.S. Chamber of Commerce was so worried about the spread of Communism that it proposed removing liberals, socialists and communists from places like schools, libraries, newspapers and entertainment. Hunter’s inflammatory rhetoric didn’t immediately have a huge impact—until three years into the Korean War, when American prisoners of war began confessing to outlandish crimes.

When he was shot down over Korea and captured in 1952, Colonel Frank Schwable was the highest ranking military officer to meet that fate, and by February 1953, he and other prisoners of war had falsely confessed to using germ warfare against the Koreans, dropping everything from anthrax to the plague on unsuspecting civilians. Full Story

Mass Hysteria Definition – Overreaction To The Coronavirus

Posted on January 28, 2021 by Alan Solomon

Mass Hysteria definition: Current Overreaction Is The Perfect Example

According to Wikipedia, the definition of Mass Hysteria is

In sociology and psychology, mass hysteria (also known as mass psychogenic illness, collective hysteria, group hysteria, or collective obsessional behaviour) is a phenomenon that transmits collective illusions of threats, whether real or imaginary, through a population in society as a result of rumours and fear (memory acknowledgement).

In medicine, the term is used to describe the spontaneous manifestation (production of chemicals in the body) of the same or similar hysterical physical symptoms by more than one person. A common type of mass hysteria occurs when a group of people believe they are suffering from a similar disease or ailment, sometimes referred to as mass psychogenic illness or epidemic hysteria. Wikipedia

Consider the following data and decide for yourself

Over 22K people will die today from hunger; this probably one of the most horrible of ways to die
110K have died so far from this year’s flu and roughly 650K die a year from respiratory-related diseases
70K mothers have already died this year giving birth
They have been over 242K suicides this year
7 million children under the age of five have died this year http://bit.ly/32wVaQA
25 million people die every year in road crashes https://bit.ly/2vId4UJ
more than 270K pedestrians die each https://bit.ly/2QEW7BN
88K will die from alcohol-related causes only in the USA https://bit.ly/2QEW7BN
22K Brits will die because of prescriptions mix-ups https://bit.ly/2QDMm6U
Between 250K to 440K will die as a result of medical errors in America https://cnb.cx/33DF9cg
two decades worth of analysis reveals that over 100K Americans will die because of taking prescription drugs. A recent study states that the figure is close to 128K. https://bit.ly/39cYtOw
This article from the NCBI database states that 100K Americans died as a result of medical errors and it’s dated 1999. https://bit.ly/3dxoRGy
5K Americans died from drug overdoses in 2018 https://cnn.it/2xhpEL6

So the coronavirus epidemic supersedes all this and deserves the attention it is getting? We have not mentioned Cancer, smoking and cardiovascular diseases, all of which kill millions per year. What about the innocent children dying every day? They don’t matter. What’s shocking is that the other viruses that were deadlier did not even receive the same amount of attention. One has to ask the question of what is wrong with the retarded media. Are reporters today nothing but mindless bots?

The disinformation campaign is now in full swing

In the short-term technical analysis cannot identify support levels because we are dealing with madness and that is the reason, we added the new level in the anxiety index. What exacerbates the situation is that there is very little liquidity, look at the bid and ask price on some options they are unreal, for example, a bid of 1.40 and ask of 5.00. This provides a few big players with the opportunity to move the markets in whatever direction they see fit.

The disinformation campaign is so rampant, I felt that this something I needed to investigate directly to offer Tactical Investors a better look at what is really going. So I decided to take the risk and go to solo to Asia without announcing it. I wanted to see for myself if the US and the West, in general, was overreacting and if Asia was doing a better job on the psychological frontier. So far, I have visited Vietnam, Malaysia, Cambodia, Singapore, and Indonesia and I can honestly state that they are doing a much better job of controlling the panic factor then we are doing in the US.

Hysteria overcomes Logic and that’s when things run Amok

People are not emptying shelves left, right and centre, in fact, the only thing seems to be selling like hotcakes are face masks. One of the reasons for this lack of hysteria is possibly due to the fact that most third world/developing nations are used to dealing with hardships that developed nations like the US are not. The contrast in the way the Asians are dealing with from a psychological standpoint of view is humungous.

For example, Jakarta is about to declare a state of emergency and yet people are not running around in panic. Malaysia is closing down its borders and the biggest reaction was that Malaysians working in Singapore raced back home to pack up extra supplies and then headed back to Singapore, where they will stay for an extended period. Many Malaysians commute daily from Singapore to Malaysia. If the border is closed, they won’t be able to go back so they wanted to make sure they had enough clothing etc. for their extended stay in Singapore.

If the leaders of the West but in particular the US could act in the same way to instil calm in the populace the reaction would be different. There are no lockdowns here, at least not yet (other than in China) and the rate of infection is not going ballistic. Fear increases stress and stress actually weakens the immune system.

https://www.youtube.com/watch?v=JVqMAlgAnlo

Videos Illustrating How China & South Korea are Handling Coronavirus outbreak

How China is Handling Corona Virus 1

China Using Drones To Assist With Coronavirus Outbreak

South Korea Using Army To deal With Coronavirus

Stock Market Outlook

We have moved deeper into the madness zone, and neutral sentiment has dropped to levels not seen for years. It is trading at 13, but bullish sentiment while below its historical average is still quite high, it would be ideal for it to drop below 24. Bearish sentiment continues to trend higher, and that’s a good sign. As things stand right now, we are close to another “mother of all buy signals” that would match that of 1987 and 2008. Our indicators just need to dip slightly lower into the oversold ranges.

For the “father of all buy signals”, the indicators would need to drop deeply into the oversold ranges, and the gauge on the anxiety index needs to move almost towards the end of the madness zone. Finally, bullish sentiment should drop below 22%. Remember this is a generational type signal so one should not expect it to occur with ease.

Subscribers who were with us back before Dec 2018 will remember how delighted we were when the number of new highs dropped to -10%. While everyone was panicking, we stated this was a fantastic development as the trend was positive. Now=look at the current readings; they are close to hitting minus 20%, something they did not even do in 2008. Given that the trend has not turned negative, this is a monstrous development. When the tide turns, we suspect that the Dow could rally 3600 points in one day with an overshoot to 4200 points. While everyone is focussing on the downward plunge, the melt-up is going to be so spectacular that it will catch all everyone and we mean everyone by surprise.

Courtesy of Tactical Investor

Coronavirus Mass Hysteria: buying toilet paper, canned food…

What explains?

First it was the masks, then hand sanitisers. Now it seems the novel coronavirus outbreak has people rushing to stock up, among other things, an essential item: toilet paper.

Shelves have been emptied across the world. In Australia, a newspaper helpfully printed out an extra eight pages as a “backup loo roll”. Fights have broken out, trolleys piled high, and across the United States, Canada and the United Kingdom, most supermarkets imposed a cap to limit the number of rolls a person could buy.
Dubbed #ToiletPaperPanic and #ToiletPaperApocalypse online, there is no shortage of videos capturing the mass hysteria that has swept up globally as shelves are cleared. Canned goods, water bottles and pasta shelves have similarly been emptied out.

So, why are we seeing panic buying across the globe?

“Panic buying and hoarding of supplies is obviously not desirable, but it’s understandable, particularly when people see images of cities, regions and even whole countries in lockdown,” Michael Baker, professor of public health at the University of Otago in Wellington, New Zealand, told Al Jazeera.

While panic buying was not seen in response to the most recent influenza pandemic in 2009, Baker said the ongoing crisis is similar to a behavioural response during a natural disaster.

“The difference this time is that people now see COVID-19 as a real threat, one that will last for months, and they may not have confidence in the authorities to contain it.” Full Story

How mass hysteria happens (and how to avoid the COVID-19 panic)?

Mass hysteria, also known as epidemic hysteria, occurs between two or more people who share beliefs related to symptoms suggestive of organic illness.
Research suggests that real pandemics can lead to mass hysteria.
A key factor that creates hysteria around pandemics is that the population’s ability to remain calm and react logically to the situation at hand is blurred and unfocused due to the anxiety and fear felt by large groups of people.
A pandemic, according to the Center for Disease Control (CDC) is defined as a “global outbreak of a new virus”. When dealing with a pandemic such as COVID-19, we need to be extremely cautious in the information we share. Pandemics (such as the Swine Flu pandemic of 2008) can very easily turn into mass hysteria cases, even though the threat is very real.

Mass hysteria, also known as epidemic hysteria, is a constellation of symptoms suggestive of organic illness but without an identifiable cause. It occurs between two or more people who share beliefs related to those symptoms, and has been described as a “social phenomenon involving otherwise healthy people.”

Mass hysteria has been well-documented throughout history, below are two separate cases from the 1900s that better explain what it’s like to be in the midst of mass hysteria. Full Story

What is quantitative easing?

Posted on January 27, 2021 by Alberto Mancini

What is quantitative easing? We are entering a new paradigm; get used to forever Quantitative Easing – QE, though it will be given other names along the journey to make it appear more palatable. The US and by default worldwide debt is set to soar to preposterous levels; get used to it and embrace this fact for nothing has changed since we got off the Gold standard and nothing will change until the system collapses, though waiting for that day might prove to be fatal as the masses are completely asleep.

If a national debt of almost $22 trillion is shocking to some; imagine how they will feel when the debt soars to $100 trillion. Many might say no way in hell that is going to come to pass. Take a look at the national debt numbers in the early 1900s. Go back to 1900 and then fast forward to the present. Once upon a time, our national debt was less than 1 million USD.

Now if you told people back then it would be at $22 trillion one day; would the reaction not be the same? We will go on record to state that there is a good chance that worldwide debt will surge to $1000 trillion before the masses discover the emperor is naked, fat, bald and ugly; until then they will continue to believe he is a handsome prince. It currently stands at $247 trillion.

Clarida hints at the Forever QE reality

In a Feb. 22 speech, Clarida acknowledged no doubts. He said that radical monetary policy has worked, that it will continue to work, and that it may well become more radical. He contended that low-interest rates are here to stay and that new policy “tools” must be sharpened and kept at the ready. As to potential adverse consequences of administered rates and the mind-control games meant to “anchor” our collective expectations of the future, he mentioned none.

Certainly, rates are astoundingly low—Bank of America Merrill Lynch recently was able to count $11 trillion of bonds worldwide quoted at yields of less than zero. Clarida said that the decline in the so-called neutral rate of interest “is widely expected to persist for years.” Full Story

Stories like this barely receive much media attention, and the masses are too busy dealing with the problems on reality TV or being misdirected by highly politicised B.S. News that only serves to allocate even more time to trivial matters. These developments indicate that developed nations like the US and most of western Europe will become increasingly hostile places to live in. This topic is beyond the scope of this publication, but the trend is in place, the US is no longer the bastion of Freedom and will soon not make it even to the top 10 of the best places to live in.

In The Forever QE Era; strong corrections have to be embraced

In terms of the stock market, until the Fed changes its mind, all sharp corrections have to be viewed as buying opportunities, and backbreaking corrections have to be placed in the category of “once in a lifetime events”, provided of course the trend is positive. That is what we are here for; to inform you if the trend is positive (Up) or negative (down). The world is going to witness a Fed that has decided to make a cocktail of Coke, Heroin, Crack and Meth and take it all in one shot. Imagine what a junkie on this combination of potent drugs is capable of doing, and you will have an idea of where the Fed is heading in the years to come.

Now the Gold bugs will cry “I told you so”. Our response to this statement; not so fast little bugs. While precious metals will do well, we think stocks in key sectors (and we are not referring to Gold stocks) will pulverise the precious metals sector in terms of returns. One such area is robots (particularly Sex-bots) and AI.

Courtesy of Tactical Investor

Random views on QE

What is Quantitative Easing?

Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply and encourage lending and investment. When short-term interest rates are at or approaching zero, normal open market operations, which target interest rates, are no longer effective, so instead a central bank can target specified amounts of assets to purchase. Quantitative easing increases the money supply by purchasing assets with newly created bank reserves in order to provide banks with more liquidity.

KEY TAKEAWAYS

Quantitative easing, or “QE,” is the name for a strategy that a central bank can use to increase the domestic money supply.

QE is usually used when interest rates are already near 0 percent and can be focused on the purchase of government bonds from banks.

QE programs were widely used following the 2008 financial crisis, although some central banks, like the Bank of Japan, had been using QE for several years prior to the financial crisis. Full Story

Quantitative Easing Explained

Quantitative easing is a massive expansion of the open market operations of a central bank. It’s used to stimulate the economy by making it easier for businesses to borrow money. The bank buys securities from its member banks to add liquidity to capital markets. This has the same effect as increasing the money supply. In return, the central bank issues credit to the banks’ reserves to buy the securities.

Where do central banks get the credit to purchase these assets? They simply create it out of thin air. Only central banks have this unique power. This is what people are referring to when they talk about the Federal Reserve “printing money.”
Lower interest rates allow banks to make more loans. Bank loans stimulate demand by giving businesses money to expand. They give shoppers credit to purchase more goods and services.

By increasing the money supply, QE keeps the value of the country’s currency low. This makes the country’s stocks more attractive to foreign investors. It also makes exports cheaper.

Japan was the first to use QE from 2001 to 2006. It restarted in 2012, with the election of Shinzo Abe as Prime Minister. He promised reforms for Japan’s economy with his three-arrow program, “Abenomics.”
The U.S. Federal Reserve undertook the most successful QE effort. It added almost $2 trillion to the money supply. That’s the largest expansion from any economic stimulus program in history. Full Story

Why do we need quantitative easing?

The aim of QE is simple: by creating this ‘new’ money, we aim to boost spending and investment in the economy.
We are tasked with keeping inflation – rises in the prices of goods and services – low and stable.

The normal way we meet our inflation target is by changing Bank Rate, a key interest rate in the economy.

When the global recession took hold in late 2008, we quickly lowered Bank Rate from 5% to 0.5% to support the UK’s economic recovery. Lower interest rates mean it’s cheaper for households and businesses to borrow money – which encourages them to spend and invest, whether that’s a family buying a new car or a company wanting to build a new factory.

But there’s a limit to how low interest rates can go. So when we needed to act to boost the economy, we turned to another method of doing so: we introduced quantitative easing. Full Story

The Boom And Bust Cycle: Fiat

Posted on January 26, 2021 by Alberto Mancini

The Boom and Bust Cycle: Opportunity Knocking?

Remember that when the markets eventually correct, this correction will be broadcasted as a crash (that’s the name of the game; scare the hell out of the masses) and it will be blamed on Trump. No, we are not getting sentimental on Trump. In reality, each president has only so much room to do what it is good for the people; most presidents don’t even use this little leeway they are given but focus on themselves. As long as Fiat is around, every president will be bought and paid for. The big players have trillions at their disposal, so the dream of finding a great leader is just that, a “big dream”. Mass psychology covers the aspect of mass manipulation very well and how the top players go out of their way to create situations that will alter the masses angle of observance. Alter the angle and you alter the outcome by altering what the masses deem to be true or false.

Freedom is an Illusion

You are only free to do things that you are allowed to do, and this includes the president. Reflect on that we will expand on it later; we already provided you with a big hint. In case you missed the hint is “fiat money”. At the tactical investor, our focus is on dealing with reality and spotting new trends. Everything else falls into the idle gossip category. It might feel good to rant and rave about stuff like this, but it is a waste of energy. The focus should be on finding a way to play with the hand that you have been dealt.

The markets follow the same path; until Fiat is eliminated this talk about the world coming to an end is nothing but rubbish. All those self-proclaimed masters of wisdom are either dead, dying or becoming highly irrelevant. Focus on the trend for that is all that matters; it is the only way to maintain your health and your wealth.

This market will experience many corrections in the years to come, some will be mild, some will be strong, and some will appear to be devastating. If you follow the trend, you will know when to move into cash and when to jump in. From a “super trend perspective” every back-breaking correction (emphasis on back-breaking) should be viewed as a long-term buying opportunity.

Trump’s presidency has made for some entertaining Moments

Overall the Trump presidency has made for some pretty damn good free entertainment; it is quite amusing to watch the other side react and equally amusing to watch the nonsense the Trump Team can come out with at times to defend their position. As time passes by, it appears that Trump is focussing more on himself than on making the country great. Who knows, he might suddenly change direction; he has a habit of doing the unexpected.

From a psychological perspective, you should hope that some shock announcement is made regarding “Trump”; it will scare the hell out of the masses, and the market will drop like a rock creating a lovely buying opportunity.

The press has always gone out of its way to twist the news and sell the masses rubbish, especially when it comes to the financial markets. However, the veil has fallen completely after Trump won the presidency. The utter garbage they focus on illustrates that IQ is no longer a pre-requisite. We would not be surprised to find out if most of those individuals who pass for reporters have an IQ that is slightly above 70. An IQ of 70 equates to that of a retard. However, on the flip side imagine how difficult it would be if everyone were a genius, so be grateful for these penguins, as their reality is based on what they read. They make trading the markets infinitely easier as their behaviour is predictable.

From an Investment perspective- Trump Administration is bullish for the markets

Trump is bombastic, so he will go out of his way to say things that will shock the markets but as the primary trend is bullish, these pullbacks ranging from mild to wild should be viewed through a bullish lens.

The Fed via fiat money indirectly controls the media; the press through the garbage they print and pass of as news control the masses. You could not ask for a better setup of mind control; the masses think they are free, but they are not; they are free to make decisions in areas that do not matter. Look around slowly and determine for yourself if they are free.

Sit down and watch the show for are things about to get more interesting and nuttier at the same time. We suspect a lot more heads will roll and the cries of rage and frustration will soar to heights never seen before. Market Update May 19, 2017

Bottom line

All massive corrections should be viewed as buying opportunities provided the underlying trend is up (bullish). The stronger the deviation from the norm the better the opportunity

Courtesy of Tactical Investor

Random views on Boom and Bust Cycle

What is Boom And Bust Cycle
A boom and bust cycle is a process of economic expansion and contraction that occurs repeatedly. The boom and bust cycle is a key characteristic of today’s capitalist economies. During the boom the economy grows, jobs are plentiful and the market brings high returns to investors. In the subsequent bust the economy shrinks, people lose their jobs and investors lose money. Boom-bust cycles last for varying lengths of time; they also vary in severity.
BREAKING DOWN Boom And Bust Cycle
Since the mid-1940s, the United States has experienced several boom and bust cycles. Why do we have a boom and bust cycle instead of a long, steady economic growth period? The answer can be found in the way central banks handle the money supply.
During a boom, a central bank makes it easier to obtain credit by lending money at low interest rates. Individuals and businesses can then borrow money easily and cheaply and invest it in, say, technology stocks or houses. Many people earn high returns on their investments, and the economy grows.
The problem is that when credit is too easy to obtain and interest rates are too low, people will overinvest. This excess investment is called “malinvestment.” There won’t be enough demand for, say, all the homes that have been built, and the bust cycle will set in. Things that have been overinvested in will decline in value. Investors lose money, consumers cut spending and companies cut jobs. Full Story

Boom and Bust Cycle, What Causes It, and Its History

The boom and bust cycle is the alternating phases of economic growth and decline. It’s how most people describe the business cycle or economic cycle.

In the boom cycle, growth is positive. If the gross domestic product growth remains in the healthy 2-3 percent range, it can stay in this phase for years. It accompanies a bull market, rising housing prices, wage growth, and low unemployment.

The boom phase doesn’t end unless the economy is allowed to overheat. That’s when there’s too much liquidity in the money supply, leading to inflation. As prices rise, irrational exuberance takes hold of investors. The GDP growth rate grows above 4 percent for two or more quarters in a row. You know you’re at the end of a boom phase when the media says the expansion will never end and when even the grocery clerk is making money from the latest asset bubble.

The bust phase is like life in the Middle Ages. It was brutish, nasty, and mercifully short. It usually lasts only 18 months or less. GDP turns negative, the unemployment rate is 7 percent or higher, and the value of investments falls. If it lasts more than three months, it’s a recession. It can be triggered by a stock market crash, followed by a bear market.

A stock market crash can cause a recession. As stock prices fall, everyone loses confidence in the state of the economy. When investors don’t feel confident about the future outlook, they pull out their investments. Full Story

Causes of Boom and Bust Cycles

Boom and bust economic cycles involve:

Rapid economic growth and inflation (a boom), followed by:

A period of economic contraction / recession (falling GDP, rising unemployment)

Causes of boom and bust cycles

1. Loose Monetary Policy

If monetary policy is too loose, it means real interest rates are too low given the state of the economy, e.g. UK economy in late 1980s. Loose monetary policy reduces the cost of borrowing and mortgage payments (increasing disposable income). This will cause a rise in investment and consumer spending. This rise in aggregate demand can cause excessive growth in the money supply and cause economic growth to be above the long run trend rate.
In the post-war period, the UK has had a long run trend rate of around 2.5%. This means that typically, productive capacity (AS) increases by about 2.5% a year. If interest rates are kept low, aggregate demand (AD) will increase much faster then the rate of productive capacity and economic growth will be too high. If economic growth is substantially above the long run trend rate, we will tend to see:

Rising inflation. Demand grows faster than supply. Therefore firms put up prices.
Wage inflation. Due to high demand for labour, there will be labour shortages leading to wage inflation. Full Story