27
Sep
11

Is the Stock Market Manipulated to raise GDP?

The stock market in recent days has been filled with wild large swings on the down side as well as especiually on the up side. There is a noticeable pattern in timing as to when the markets rally. One of the most frequent periods of the calendar when these up swings are occuring are during the last week of the month end and quarter ends. With recent declines of the various sub-sectors that the Gross Domestic Product figures of many nations are composed of, the importance of stock market gains as well as commodities increases becomes the last resort of countries desperately trying to create GDP growth in their economies. Via pumping up the stock market and commodities, the Government can make up for losses in the other areas of measures that the GDP is composed of  to show growth in an otherwise lack lustre or negative period. But how is this possible? In the early 1930’s the United States Government collaborated through the largest banks in America to buy stocks to keep the markets propped up after the Great crash of 1929 . In recent years Bank of America, Goldman Sachs, Morgan Stanley, Citigroup and HSBC have 95% of all the derivatives outstanding in the world (totalling in the trillions of dollars) and through leverage can cause huge swings in the markets. The volume of trading is noticeably lower when the markets sky-rocket at the end of each month during these strong rallies as the big boys move in each time to corner the markets without participation of retail investors.

Although not admittedly, the US Government has a huge role in working closely with these big institutions to create such explosive upswings. The only difference between right now and in the past is that these measures were used only temporarily for shorter term durations in the past rallies after a crash to get the markets and investor confidence going again and not extended for such a long period. Many questions arise as to what would have happened if the stock markets were not propped up so heavily? Why is the government not investing in the economy and only relying on stock markt gains? Is this Japan all over again?

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