Sperandeo:  “In my 50 years in this business of reading the tape, I can tell you with great certainty that every time there is negative news the Fed comes in, via the banks, and manipulates the stock market higher in order to keep the appearance of strength....

Continue reading the Victor Sperandeo interview below...


UPDATE: To hear which company just made one of the most exciting high grade

discoveries that just had a massive 101 meter drill strike, as well as

major financial backers click on the logo:

“Today we had this 1 percent decline in GDP and there should have been some downside response to that.  Under normal conditions there certainly would be.  Shortly after the GDP news release we had Fed official Jeff Lacker saying that GDP in the second quarter ‘will bounce back.’

But why does a Fed official have to come out and support the market with his comments?  You see, Eric, the whole game plan is pushing the markets higher.  So there is no question there is Fed buying in the markets, being done through the banks, to keep the markets stable.”

Eric King:  “Where is this leading the markets?”


Sperandeo:  “Let me get philosophical for a minute, Eric.  There was a Chinese philosopher, Han Fei.  And Mao Tse-tung was a major believer in this man.  Fei taught people how to be emperors -- how to kill people and do whatever it takes.  All of the people he taught were famous emperors.

Fei noted that human nature is based on fear and greed, or what he called ‘reward and punishment.’  Fei believed that in order to maintain stability you needed to appeal to fear and greed, or, again, what he called reward and punishment.

Now, you look at the Fed today and there is no punishment.  You never get punished by being long stocks, regardless of what the news is.  There hasn’t been a 10 percent correction in 32 months.  Also, the market is up 41 percent from the lows of November 2012.  So this has been an intermediate move of 550+ days, where the stock market is up 41 percent without a correction of any kind.  Therefore, you have the entire world long now.

So, to answer your question, Eric, you have everybody long with no punishment.  But the thing that will really hurt the market is when there is an uncontrollable Fed event.  If Putin takes Ukraine, or Israel attacks Iran and oil goes somewhere between $150 to $200 a barrel, the Fed can’t control that.

Now you see, Eric, everybody is long and up to their eyeballs in margin debt (laughter ensues), and then you get a 2008 trigger event.  That’s the risk here.  But in the midst of all this, the average investor is being led to believe that you just keep buying the rising stock market because ‘The Fed has got my back.’  Well, people get reckless under those conditions, and that’s why margin debt is at record highs.  So people with large risk exposure may run into serious trouble ahead.”

Eric King:  “Part of this agenda by the Fed and other central planners is to keep pressure on the price of gold and silver as they push the markets higher.”

Sperandeo:  “Gold is an inflation hedge and a chaos hedge.  The central banks can’t allow the price of gold to go above $1,400, so there is a lot of paper selling in these markets because it gives more substance to the dollar and the bond market.

What’s more interesting is the bond market rallying to new highs as stocks are making new highs.  That’s a conundrum.  One of these markets is right and the other one is wrong.  My bet is on bonds because bonds are predicting a slowdown, and that’s correct in my opinion.

Again, stocks should be going down but there is this ‘Fed put’ or manipulation underneath the market.  Now this is the important point, Eric:  The U.S. economy must be in grave danger, and I want to emphasize that again, grave danger of the system completely collapsing.  This is why the Fed does not dare allow the stock market to sell off.

There is no way we after five years that we should still be at zero interest rates, and allowing markets to do what they are doing with continued Fed manipulation, unless things are very, very dire.  I want to be clear about this, Eric, what I am saying is that things must be very alarming behind the scenes because the Fed won’t allow any kind of selloff to occur in stocks.

You have to look at the comments by Fed member Lacker stating that GDP will be up in the second quarter.  I can understand some economist coming out and saying that, but for a Fed official to rush out and make that statement just reveals how protective the Fed is and how worried the Fed is about a market sell off taking place.

But that’s actually a very stupid comment for this Fed official to make because it reveals just how dire things are behind the curtain.  They are really grave (laughter ensues once again) for the Fed to be this protective with the Dow nearing the 17,000 level this long after the collapse of 2008. 

This is a ‘Tulip Bulb’ market.  I’ll give you a good example:  Hewlett Packard was up 6 percent the other day.  Hewlett Packard is firing people and they are taking the money that they would pay these employees and they are buying back stock.  Hewlett’s earnings have gone down something like 12 quarters in a row and their business model is in a death spiral. 

Meanwhile, the stock does nothing but go up because of the stock buybacks and whatever shorts are out there are getting squeezed.  Do you see what I mean?  Stuff is happening that is unnatural because things are so out of whack.  This is just one example of how distorted things have become.  So the fantasy will die -- it’s just a question of how much fear and panic we will see in the market on the next leg down.”

IMPORTANT - KWN has many more interviews being released today.

© 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The audio interviews with Michael Pento, Dr. Paul Craig Roberts, Gerald Celente, John Mauldin, Eric Sprott, Bill Fleckenstein, Egon von Greyerz, James Dines, Andrew Maguire, David Stockman, Art Cashin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

To return to BLOG click here.

© 2014 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

Subscribe to RSS
KWN Blog