I have no confusion about this at all. And I don’t think the market will crash because it will be manipulated to the point where it can’t crash.
Here is a simple thought problem. The axiom is that the markets are ruled by their indexes, because that is what the vast majority of investors see. If you can manipulate the indexes, you can prevent the indexes from ever collapsing.
It only needs a few things to pull this off.
1) You have to be able to act very quickly, and secretly, so that no one can see your blatant manipulation. The FED can do this, because their actions are invisible and only the outcomes of those actions are visible.
2) You have to have the force to act, meaning lots of money, in the tens of billions of dollars, and the willingness to act without fear of losing it all, because it is not your money.
What that sounds like is that the mere fact that there's no record anywhere of the Fed buying stocks, is proof positive that the Fed's buying stocks. That's the same reasoning used to prove that we're being controlled by invisible black helicopters.
What could it be? How about if people avoid banks and a lot of wealth goes into metals, valuables, or in the mattress (so to speak). I could see that happening if the gov makes moves to gain control of retirement money or those near-zero interest rates don't turn around soon. If that happens, people will spend less and horde more.
Just a thought. I've been trying to self-teach myself about what a meltdown of the economy would actually look like from a financial standpoint. It does seem that some of what I hypothesized is happening already.
The Quanitative easing has artificially sent all of the capital to Wall Street and Housing, as it did in 2008. The problem is that zero interest loans have enabled the Stock Market to rise on margin (as it did in the 1920’s) and allowed people to buy housing that they can not afford, based on zero or negative financing. All of this artificial manipulation is orchestrated by the Fed because of their belief in “Wealth Effect”, or, in other words, if people believe that they are more asset rich than they really are (e.g. inflated 401K’s and inflated housing), then they will spend more money. Therefore, the economy should be stimulated to the point that real unemployment should be dropping and the economy should be improving (it is not!) All of the percieved wealth is being transferred overseas because of derivative valuations, and a return of interest can be made overseas, not here. Therefore, the accumulated perceived value that is being manipulated is in excess of $300 Trillion dollars. People ask, what do we care what happens in Europe and Russia. The answer, when one base card is knocked out because of a crisis (could be Greece, Ukraine, or any number of hot spots), the whole house will come tumbling down. I don’t believe that we will make it to 2016. That card will be pulled while Obama is still president...Goodhart’s Law was published in 1975 by the Reserve Bank of Australia, and it states: “When a financial indicator becomes the object of policy, it ceases to function as an indicator.” Also, “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” ANYTHING that you hear in the media in the future will be for manipulation purposes, until it will collapse from it’s own weight. In other words, get your financial house in order—the balance on your 401K and the value that you think you have in your house are an illusion. Just Sayin’.