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Jun-12-2013 16:16printcomments

Central Banks Scale Back Protective Measures

I'm sure there are stock and banking gurus out there who know exactly what measures and how much scaling and support is going on, but the average investor, who is driving the market, has no idea what the five-word-phrase means.

Central Bank
Courtesy: greekshares.com

(SANTA ROSA, CA) - Google, "Central banks scale back supportive measures," and you will get a whole host of stories about the stock indexes taking a down turn due to this "scale back."

What you are not likely to find, however, is any stories directly relating to what a "scale back," is exactly, or what measures they are talking about. Which banks? What measures?

This seems a bit odd to me. Hundreds of news sources all using the same terminology. Actually the same exact term. "...banks scale back protective measures..."

The odds of any two people or journalists (because journalists aren't real people) using the same five words in a row is fairly low, I'm sure. Unless they have been systematically fed those words from another source. Obviously, in this case hundreds of news agencies and journalists have used these five words randomly and it must be sheer coincidence.

Each story tells of how US stock indexes have taken a downturn and this is due to the magic five word phrase we discussed earlier. None of them really describes, which indexes, what the actual cause of the downturn is, or what measures are being scaled back.

I'm sure there are stock and banking gurus out there who know exactly what measures and how much scaling and support is going on, but the average investor, who is driving the market, has no idea what the five-word-phrase means. Regardless, these hundreds of stories will cause the market to move simply through their conjoined influence over the average investor and the marketplace.

Philip Northcutt
Land Use Consultant

Northcutt Ranch is a veteran owned and operated ranch exploring viable options in  sustainability, organic farming, livestock, and a family-oriented ranching lifestyle. 
We hold dear the concept of horses for both work and pleasure.
We believe that as stewards of life and land we are the guardians of the world our children will inherit and that our resources must be managed in a way that reflects that ethic.
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Every day at Northcutt Ranch we learn a little more about love, life, ranching, agriculture, and sustainability.

    Phil Northcutt is combat veteran of the Iraq war and a former infantry Sergeant in the United States Marine Corps. He is an agriculture student at Santa Rosa Junior College, and works as a veterans advocate connecting veterans in need to the resources and non-profits that assist them.

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    Bill Annett June 13, 2013 9:23 pm (Pacific time)

    As Paul Krugman has so aptly put it, the ones who offer the mmost discussion on this subject are those that know nothing about it. You continue to rant about Wall Streeet banks - sometimes correctly. Jamie Dimon castgated them even more knowledgeably recently.That isn't the subject Phil began with.He was confusing central banks with the Street. You still are.After 62 years in and around Wall Street and Bay Street, I've forgotten more about central banking than you two will ever know.

    pinkfloyd June 13, 2013 6:38 pm (Pacific time)

    Tariq is correct, and the book he mentions is a necessity to read. When the rothchild federal reserve bank took over our government in 1913, and at the same time birthed the IRS, which was never ratified by congress, using IRS as their strong arm, there has been nothing but havoc and making the bankers rich while America suffers. Good job Tariq, but keep studying, it even goes deeper. G.E. Griffin is a great resource. And these bankers are not satisfied with taking all our money, they want to control the world thru owning resources, (BP etc) food supply, (monsanto) water supply, total surveillance, eugenics,(the pharma industry) etc. They also birthed and control the U.N. and NATO. They finance alCIAda while taking our rights away because of alCIAda...They took over the indoctrination system they call education, and that is why people are so dumbed down. My studies show me they are about to start another world war, just as they started WW1 and WW2..not for our freedom, but for the bankers to control.The same bankers from the fed reserve financed both sides of WW2. Keep up the research Tariq and dont ever be afraid to share. If we dont expose these bankers, they will create a true armegeddon.

    Tariq Khan June 13, 2013 3:09 pm (Pacific time)

    Bill Annett - what a load of nonsense. The FED is a private bank owned by the major banks on wall street. If you want to learn how the FED operates and what is it real purpose just pick a copy of G Edward Griffin excellent book on this subject called "The Creature from Jekyll Island". The purpose of the central bank is to finance government deficits and act as a bank of last resort for bankrupt banks. Far from providing stability, Central banks cause the boom and bust cycles. All QE has done is forestall what should have occurred in 2008 by transferring Wall Street losses to the main street, that is us the taxpayers. In fact, bankers have gotten richer by QE. Since then we have learnt that every other market - Libor, energy, FX and commodities - has been manipulated and rigged and the authorities have done nothing. No banker has gone to jail or lost their ill gotten gains.

    Bill Annett June 13, 2013 11:41 am (Pacific time)

    Hi Phil - I'm not a guru, but I've put in a bit of time on Wall Street, beginning in 1951, and as a modest student of central banking. Central banks are not investment banks, chartered banks or commercial banks dealing with the public - they are government agencies - such as the Federal Reserve System, Bank of Canada and Eurobank - directly accountable to the administration of each country, whose purpose is to influence and stabilize the business cycle, interst rates, money supply and promote financial stability. The supportive measures you mention include - for example - Ben Bernanke's efforts over the past year and a half to apply "quantitative easing" by a program of the Fed's buying of Treasuries and other highrade securities from the commercial banks and investment dealers (1) to expand banks' lending capability, (2)in effect to increase money supply and (3) stimulate the economy. It hasn't totally been successful for a variety of reasons. Republicans think it's too much, Paul Krugman thinks it has been too little, and inflation is always a danger, but the objective has been to goose the economy.Lately, they've announced a slackening in that program, which is the "scaling back" you refer to. It naturally results in a slumping stock market, since it's bullish for bonds because interest rates rise as a result. But that's probably a temporary knee-jerk reaction. There are a lot of criminals on Wall Street worthy of our criticism. They shouldn't be confused with the cedntral banking system, which is at least trying to stabilize the mess we've been in since 2007, and which, by the way is not owned by the Rothschilds and Queen Elizabeth and an international consortium of Jewish conspirators. It has no capital stock and is totally owned by the Federal Government.

    Tariq Khan June 13, 2013 4:43 am (Pacific time)

    Philip, if you mean the average investor being the person on main street, then it is not the average investor that is driving the market higher. There are a variety of reasons for the stock market exuberance and one of the main one might be the Yen "carry trade" of the hedge funds. In reality the average investor is pulling money out of the stock market despite what the msm shills will like us to believe. The Yen carry trade has been made possible by unlimited money printing of the FED and now the Bank of Japan. There is no scaling back of the QE either. It is too late. If they pull QE the financial system will collapse. Central bankers are lying as they have always done. QE will remain as long as there are budget deficits and no one believes that the budget is going to be balanced let alone go into surplus any time soon. If you check, you will see that tax receipts have been going down in the last few years and this will continue. The only protective measure being scaled back is the deposit insurance protection which is now euphemistically being called "bail-ins" which is another name for stealing savers money Cyprus style. But this is not what the shills are talking about. Everything else is propaganda including the US's road to recovery, with or without shale.

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