Most stocks in the stock market meet the SEC’s definition of a Ponzi scheme.

The fact is:

What makes a stock price move is not the earnings or growth of the underlying company, but the the exchange of money between investors. Profits from buying and selling stocks come from other investors who are buying and selling stocks. When one investor buys low and sells high, another investor is also buying high and needs to sell for even higher.

Most public companies do not pay investors, investors pay other investors with the illusion that the money is coming from some abstract/imaginary value of the company.

Share buybacks are typically scams because companies often issue stocks right before or after the buybacks. Google said they bought back 5 million shares in 2016. That same year their shares outstanding increased by 3 million.

Stocks are not real equity ownership instruments because there is no legitimate monetary connection between stocks and the companies.

A share of Google (GOOG) trades at $1100, but Google states in writing; they don’t pay dividends, there are no voting rights, and the par value of GOOG is only $0.001 per share. So if you own a share of Google, you won’t receive any money, you cant vote, and Google will only pay you $0.001 for that share you bought for $1100. Does that sound like ownership?

The value of a stock is just an idea. It is something completely cerebral and imaginary. Real money on the other hand, is finite, traceable, and it is what investors ultimately care about and want.

The stock market value has grown to over $31 trillion, which means investors think they are entitled to $31 trillion of real money. But there is only $3.8 trillion of real money in the entire U.S. economic system.

https://www.quora.com/How-true-is-the-statement-that-the-stock-market-is-essentially-a-Ponzi-scheme

The Stock Market is a Giant Ponzi Scheme

An Auction with Fake Buyers, that will end well!

The reason why is when you have the Federal government in the form of the Federal Reserve injecting 85 Billion worth of artificial capital, i.e., capital that wasn`t earned, or created through increased sales, revenues or increased productivity gains.

The problem is that this 'artificial capital' is not real, it is temporary and the Fed will discontinue the artificial capital injections, and even remove the liquidity out of the system when they begin tightening.

You call it Asset Purchases, I call it a Ponzi Scheme

So a Ponzi scheme pays out old investors with the proceeds of the new investors. Well, current retirees right now are benefitting from these 'artificial injections' into the stock market at the expense of future retirees who will be left holding the bag on depreciating assets once the fed stops the artificial injections, and asset prices go down. Moreover, when they take the additional step of removing the liquidity from the system, i.e., tightening mode, asset prices will go down even further.

Consequently, anybody who takes money out of the stock market while the fed is artificially raising asset prices is benefitting at the expense of all 401k money that is buying assets now at artificially raised prices.

In short new investors are buying assets at prices higher than they would otherwise without the Fed`s involvement in the markets.

These are 'Temporary Purchases' right?

Hence the cost basis of their investments is much higher with each artificial liquidity injection. This is great for current retirees, but at the expense of future retirees who now have inflated assets that will deflate once the Fed takes away the proverbial punch bowl.

Read more: http://www.econmatters.com/2013/02/so-david-einhorn-is-dumb-money-on-apple.html Throw in the fact that baby boomers will start withdrawing their retirement capital to live on and those are two deflationary variables that future 401k retirees must overcome.

Nobody likes the Re-Pricing Mechanism

By artificially raising prices in a temporary fashion the Fed is guaranteeing losses for the future for anybody who bought the assets under these 'artificial circumstances' and these policies are withdrawn and the very same assets re-price to non-artificially inflated levels.

3 Alternative Outcomes

The only way the Fed can avoid this guaranteed negative outcome for these investors is to hope real productive growth and private capital can substitute for the greatest artificially created liquidity market capitalization in history.

Read more: http://www.econmatters.com/2013/01/apple-price-target-50-stock-by-2016.html

Or alternatively, the Fed can never stop artificially raising asset prices with the same magnitude and level of involvement. So they have put themselves in a box, effectively committing them to QE eternity.

The other possibility is they lessen the liquidity as much as private capital can make up the difference, i.e. a QE lite.

Should Retirees Gamble with the Fed?

But for future retirees this is entirely too risky territory to be caught up in a scenario which the Fed seems to have no solid exit plan. And I know that employees just sort of allocate money into the company sponsored plan with a given level of investment choices each month without really thinking about these deeper issues.

Read more: http://www.econmatters.com/2013/01/when-gold-bugs-start-selling-look-out.html

But every asset that employees have bought over the last four plus years and put in the retirement account has been artificially raised through Fed involvement. When the Fed stops being involved investors should seriously move out of these investments and into money market funds to protect the gains made in the artificial liquidity driven period.

Don`t be left looking for a chair, when the music stops

Otherwise, these investors are going to be paying the price, just like in a Ponzi scheme when the liquidity tide recedes back into the ocean of actual asset values. Make no mistake current asset holders are reaping the benefits, at the expense of current investors, and future asset holders who will be left holding the bag of artificially inflated "Non- Stores" of Value! The Federal Reserve is guaranteeing that these assets will lose value in the future.

https://www.businessinsider.com/the-stock-market-is-a-giant-ponzi-scheme-2013-2

Wall Street Is the Definition of a Ponzi Scheme (Literally)

When you picture buying stock in a company, what do you picture? You probably imagine a company like PepsiCo, and you are an investor in that company. You own a tiny piece of it, and because of that, you get a tiny proportion of the profits, which are called “dividends.” Well, that’s not what a stock is. That’s what stocks used to be, but that was back when top hats were worn by non-magicians, and if a lady showed her knees in public, she was considered a floozy who should die alone.

In modern times, you almost never receive the profits of the business. Dividends are rarely paid out, and they don’t usually amount to much. Plus, the company is not obligated to pay you anything for your stock ever.

Don’t take it from me, take it from someone much smarter than me. Here’s an example about Google from Tan Liu’s book “The Ponzi Factor.”

A share of Google can trade around $900, but Google explicitly states in writing that the par value of their stock is only 0.001 dollars. Google also says that they do not pay their investors any dividends, and their class C shareholders have no voting rights. So, if you own a share of GOOG, you won’t receive any money from Google, you won’t be allowed to vote on corporate issues, and Google isn’t obligated to pay you anything more than 0.001 dollars for that share you bought for $900.

So this begs the question, “What the hell do you own?” The gut-wrenching answer is nothing. You own nothing. You own a slip of toilet paper that you might be able to convince someone else to pay you for.

Next, if you’re feeling cheeky, you might ask, “Then where do the profits come from? If I buy Google at $20 and sell it for $220, where did that $200 come from?” The answer is it came from other investors who were willing to buy the stock. As Tan Liu puts it,

This is actually a negative-sum situation because the underlying company isn’t involved in the transaction. The investors are just cannibalizing each other for profits, and there are fees attached to every transaction.

Ah, cannibalizing each other for profits—now this is starting to sound like an American enterprise! It says it right there on our flag, “America: Cannibalizing each other for profits since 1776!”

The money you make from most stocks, if you make money, is coming from other investors pumping new money in. And if there aren’t new investors willing to buy your stock, then you’re just screwed, standing there with your thumb up your ass (which is an odd expression if it’s supposed to mean the person is doing nothing; in fact, it sounds like they’re involved in a very significant event).

So, to rehash, this is a system where you buy into something and the only way you make money is by convincing someone else to buy it. If no one does, then you lose everything. Why does that sound familiar? Oh, I know. It’s the dictionary definition of a Ponzi scheme.

Again, don’t take my word for it. The Securities and Exchange Commission (SEC) defines a Ponzi scheme as “[a]n investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.”

The stock market is a Ponzi scheme. A Ponzi scheme is the stock market.

https://www.truthdig.com/articles/wall-street-is-the-definition-of-a-ponzi-scheme-literally/

China Arrests Third Canadian Citizen As Feud Worsens

That didn't take long.

Three days after warning Canada about "escalation" and "grave consequences" amid a worsening diplomatic crisis, China has arrested a third Canadian national, according to Canada's National Post, which cited a spokesman for Global Affairs Canada, the international arm of the Canadian government. No further details were provided, other than saying the Canadian government was "aware of a Canadian citizen" being detained.

Global Affairs diplomatically refused to connect this third arrest to the arrest of Huawei CFO Meng Wanzhou in Vancouver earlier this month. The executive, the daughter of one of China's most successful businessmen, was released on bail last week.

https://www.zerohedge.com/news/2018-12-19/china-arrests-third-canadian-feud-worsens

>>4374250

>>4374382

monetary base

https://fred.stlouisfed.org/series/BASE