The Last Big Drop Before Elections
Over the next month major decisions need to made by the worlds central banks. Is there enough of a crisis to inject large amounts of cash into the system? Or can they just sit back and see how the economy does with out their help? The decisions over the next month will greatly effect the growth of the economy. Do we need help? Of course if the news of the worlds economy is bleak enough they will have to help.
If-only someone could make sure that the news is terrifying in the weeks prior to these important Fed and Central bank meetings. If they could just get the banks and other corporations that have been helped by the government to hold off on hiring during the time leading up to these meetings. If only a large conglomerate had control over the news and could pump out stories that create fear. Maybe if they owned a television network that has news, business news and even the most trusted news; the late night comedians.
Just think they could create a crises for a month that would force the central banks to make a huge contribution. What if the news included that the largest conglomerate in the united states may loose funding? Their stock would tumble and take the Dow 30 with it.
Would a panic in the stock market hurt the economy? not for long, it would help keep interest rates down for another month (as investors flee to bonds). Oil prices would drop making Obama look better with lower fuel prices. The republicans would make a stand on how Obama can't create jobs.
After the central banks make their decision then the banks and other government influenced corporations could hire just one person per bank branch or business and that weeks unemployment report would be reduced by 200,000. They can do these repeatedly as needed. The controlled news media could change the twist on the news to positive, nothing would really change except the perception of economy. But that is all it take to start a rally. With the "smart" big money having gone short on the market they will have to buy stocks to cover. This is how we get the big rallies. Since the Republicans would be entrenched in a platform of how Obama caused high gas prices and unemployment , they will look foolish when things flip this summer. As money goes from bonds to stocks interest rates would start rising forcing those on the fence to hurry up and refinance or get new loans. Since most business needed business loans and loans now are variable rates the banks will make a fortune when rates go up.
The end of last month is when the central banks and fed need to announce their plans. The Fed may not do much of anything this time but the Central banks probably will. The ploy will most likely work and there will be money flowing in from the Asian and European Central banks. This will quickly turn the stock market higher starting the "short squeeze" and rally.
The last quarter of Last year through Jan we rallied 3000 points in 4 months. From the end of next month to the end of the last period before the elections is 4 months.
The Dow Jones Industrial Average can be in the mid to low 11s late June and still easily rally to a record high before the elections. It won't feel like it can when we are told GE may go bankrupt and the world is falling apart but that is what they do before flipping the news around.