Despite
all the warnings of a new market crash, no government, bank, or,
international organization, are taking effective measures to deal
with it. The excuse is that the international financial system has
become so complex that no one knows how to avoid a new crisis.
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But several recent developments in the markets and
contradictory advice and statements by experts, can be explained only
if some try to profit from a collapse of the markets, and are betting
in a giant "shorting".
When markets go up, the result is accumulated profits
due to the increased value of the shares and other financial
products. But investors can bet also on the fall of the markets and
values of the shares, through the so-called shorting.
In simple words, the shorting works as follows: an
investor borrows shares from a broker, betting that the price will
fall. After the shares are sold, the investor's account is credited
accordingly. After a period of time, the investor must return the
borrowed shares to the broker. If the price has dropped in the
meantime, the investor will make a profit proportional to the fall in
equity prices. How is done? “It's the virtual economy, stupid!”
The
profitable side of a crash
In today's capitalism, even a crash of the markets could
bring profit. First, the coverage of losses through public funds is a
given fact. The losses of most banks in 2008 were covered by state
funds. Something similar is done for every non-negligible falling of
the markets through "quantitative easing" and similar
interventions. The ECB, the Bank of England, the US Federal Reserve,
or, the People's Bank of China, are throwing huge sums in the
corresponding markets to buy stocks and bonds, for the purpose of
recovering the stock markets.
The big banks and large investment institutions are well
aware of what to do when they will come across a new market crash:
they will resort again to the central bank of the state, which will
support them again, with the excuse that they are «too big to fail
", as in 2008.
Second, the large-investors know how to steer the
markets, how to bet on a new crisis, and how to take advantage.
Therefore, it should not be surprising that the warnings about the
upcoming crash, come not only from "well-meaning" analysts
who worry about the economy, but also by large-investors. No one
would expect by them to proclaim that a new crisis comes.
Even if a crash is inevitable because of the bubble in
the international economy, the timing and the manner through which it
will occur can be affected by targeted interventions in the markets.
The amounts needed for such a shorting of the the market are huge.
The hedge funds, which have at their disposal a total of more than 2
trillion dollars are holding a leading position among the usual
suspects for interventions of this magnitude.
Controversial
actions and statements
Several recent developments indicate that something is
"cooked" in the markets. During the first week of January,
some hedge funds and companies, through only one US bank, made the
largest investment in the US since 2010, through shares of total
value of 3 billion dollars.
In August, the Chinese government banned the shorting
and the operation of certain hedge funds in the markets of China. Of
course, the Chinese plutocrats who gained about one trillion dollars
from China in 2015, shorted the Chinese market indirectly. This money
was not invested in other markets, but in deposits and luxury
properties in London and the US.
In January, international banks warned investors to sell
everything because a crash is coming. But these warnings serve those
who intend to buy the "sold out" shares cheaply, waiting
for a temporary recovery in the stock markets, in order to "short"
the market and receive the earnings later, as soon as the crash
happens.
The various Croesus of the international economy, urged
the investors at this year's Forum in Davos not to invest their
money. They also urged central banks not to intervene in the economy.
But they didn't explain, why the last eight years did not complain at
all about the interventions of central banks from which they got
richer, and why now, they believe that the markets will recover
without new investments and state interventions.
The
objectives of the deliberate confusion
In 2008, the experts were seeing the bubble, did nothing
to prevent the crisis and came out winners. In 2016, they seem to be
better prepared. They spread confusion deliberately, to gain even
more from the next crisis.
A peculiar war of impressions has already begun. For
example, the big investor George Soros is stating that he bets on the
decline of Asian currencies, and the Chinese Government responds that
any movement against the Chinese currency will fail.
A more likely target for shorting is Eurozone, as the
euro, with the complexities of the refugee issue and the Brexit, is
becoming increasingly an easy prey. Whatever the goal, there must be
first a non-negligible rise of the markets, on which to build a
shorting and the subsequent fall.
When such a rise will be observed with the subsequent
fall of the markets, should not be seemed strange the fact that
behind the pin that will prick the bubble of the global economy, lies
a giant shorting.
Article
by Michalis Gianneskis, translated from the original source
: tvxs.gr
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