Without free money from the Fed, Mr. Market doesn't want to play anymore.

While it still might be a bit too early to call in the fat lady for a song, the events unfolding right now appear to be agreeing with my long term view that the rally since March 2009 has been driven by unsustainable government intervention, period.  People are contracting their spending and banks are shunning new lending.  The government tried to reflate everything in light of this massive de-leveraging.  As long as the government was playing this game, the markets were playing along.  But when Bernanke decided to end QE2, the smart money was already heading for the door.  Back in January I wrote, "Anyone who thinks the stock market rebound was normal economic activity is deluded, insane or worse.  All of the gains were driven by government intervention, period.  I'm not saying it couldn't go up even more but at some point government intervention is not real economic pressure.  It's all temporary because it's driven by debt, not real money."

Back in early July I noted that Goldman Sach's chart looked like it was rolling over.  The smart money was tip-toeing out the back door.   Today the Dow has fallen below 11,000 again.  The fall has been fast and furious.  Worse yet, the government is having the equivalent of a running gun battle with the S+P credit rating agency over their decision to downgrade US debt from its AAA status.  You have to keep in mind that it was government which actually put the credit rating agencies in power by requiring certain types of debt to have their ratings before it could be bought by certain types of government institutions.  But now that these rating agencies are taking all the flak they are fighting back with the truth.  It's now every con man for himself.  I wrote about this very thing not long ago, "Unfortunately for the con men, organized crime rings are generally brought down from within, not from external forces.  The con men and criminals take to infighting about who owns the right to fleece the people.  The numbers of con men grow and grow until there is not enough fat on the sheeple to feed all the wolves and then the wolves start infighting.  Eventually some of them start telling on the other ones and the whole thing unravels."  People are watching this fight and they realize that it means nobody is at the helm anymore.  Cool and calm is all but gone and all of our "leaders" have taken to infighting and finger pointing.  This is not good for confidence and confidence is a prerequisite for any con game to continue running.

In another post I wrote, "Of course, some of this is pretty easily predictable.  When Bernanke was printing money from thin air and dropping it on the economy from a helicopter, the economy started bouncing.  Unfortunately, so did gold and silver and gas and food prices.  Now that he is trying to pull back on the stimulus it is very unlikely that the recovery will continue.  The minute Bernanke puts the defib paddles down, the heart is going to weaken and stop.  This time it will likely happen much more quickly than the last time.  At some point the world is going to figure out that the heart is beyond saving and that's when the big global collapse will likely set in.  Unfortunately, these things often follow the laws of exponential awakening.  Most people think they will be OK until suddenly they are far from OK and there they sit, wondering what hit them and wondering what the heck to do next.  I urge people not to allow themselves to end up in that position.  Make some preparations.  If they never get used then consider it an insurance premium paid with no claim made.  The premiums are cheap right now.  If the global economy threatens real collapse again then the premiums will go up dramatically.  Complacency regarding this is just not a good Darwinian survival strategy right now.

When things begin to slow again, Bernanke will pull out the paddles for QE3 but I don't think it will work this time.  Exponentially more stimulus is having exponentially lower positive effects.  The global con is running very thin."

Nobody can predict the future to perfection.  Nobody should even try to unless done in the name of economic entertainment while waiting for the real show to begin.  But everyone should at least understand the fundamentals which are driving a very predictable overarching trend.  That trend is that the global debt Ponzi which has been enabled by the fraudulent money supply consisting of fiat currency and (especially) fractional reserve lending has now entered the collapse phase.  Don't count on government to save you because government doesn't give a $hit about you.  Government just wants to stay in power.  If half the people in the US had to die in order to achieve that, they would let half of us die.  I'm not saying they are out to kill us, only that if that was the solution to their problems they would gladly accept it in the name of "the greater good" or whatever other f-ed up excuse they could make up.  You and I are only as useful to government as that amount of wealth that it can parasitically steal from us.  This is the role of the patsy in the con.  If you still don't get it, let George Carlin explain it to you in very harsh language (RIP George).

By the way, don't be mad at the dems if you are GOP, and don't be mad at the GOPs if you are a dem.  BOTH SIDES voted into power a complete collection of lying A$$HOLES like Nixon, Bush, St. Reagan, Slick Bill, Bush2, and Obama.  None of these con men ever once told the truth to the American people.  They ALL used more debt in order to drive their policies.  They ALL pushed us to live beyond our means and WE THE PEOPLE applauded them the whole time for it.  Sorry, man, the truth is that you and I are to blame for this crap.  We the people laughed at the real world business sense of Ross Perot.  And we the people couldn't listen to the squeaky little voice of this century's most honest statesman, Ron Paul, because he was saying things we didn't want to hear.  He was trying to pull the punch bowl back and we were still drinking the Kool-Aid. 

Well, now that it's becoming clear that the person who made that Kool-Aid was the economic equivalent of Jim Jones, don't be a putz who blames everything on the next guy.  Take your fair share of the blame.  Stop electing leaders because of the way they look or sound or because of what goodies they are promising you.  You will never get those goodies anyway.  Vote for people who have stated principles and who walk the walk demanded by those principles.  I assure you, there is only one presidential candidate for 2012 that even comes close to fitting that description: Dr. Ron Paul.  He cannot fix what has already been done.  All he can do is allow the free market to do its job and unwind this mess quickly so that we don't have 20+ more years of stumbling and uncertainty.  Ron Paul can return us to real growth which is underpinned by people having real confidence that they will be able to keep what they worked for and that is only possible with a return to an honest money supply.  Ron Paul is a global expert in that field and nobody else in the 2012 presidency running is even close to his level of understanding of the root problem that must be solved.