Liquidity Bubble Bursting as We Speak – Wall Street Underground

By Nick Guarino | April 8, 2010

Wall Street, the investment bankers, and their orgy bedfellows the whore politicians, have dreamed up plenty of low-down dirty rotten tricks. But the most deadly of all, that does the most damage, is the liquidity bubble.

It causes loss of wealth for the masses like no other evil trick they have cooked up. And it fools the most people.

In the liquidity bubble, government creates vast amounts of money through its discount window. Wall Street banks and financial institutions borrow that money, at close to zero percent interest rates. Free money.

Then they leverage their free money hundreds of times over, with derivatives. They drive up the price of key financial assets and commodities. They do this through their hedge funds, and off-the-books, special-purpose entities. (Mostly used to commit fraud.)

Based on REAL top-line driven bottom line sustainable profits, the Dow should be at 5000 right now. Heading lower. It sure as shit should not be around 11,000, in its biggest one-year rally ever.

Similarly, gold should be $300 an ounce, not $1100. Oil should be at $10 a barrel, not approaching $90.

These markets have soared against their fundamentals. Strictly due to that massive liquidity creating bubbles in these key markets the wall street and banker whores have chosen to manipulate. Government created that liquidity out of desperation. Out of its misguided attempt to bail out the economy. To try and stop the slide into a depression so big, it will make the last one look like a cub scout jamboree.

These rallies you’ve seen are nothing more then short-term bubbles. They create the false illusion of prosperity. Then they collapse in devastating busts, as the bubbles burst once again.

You have witnessed several of these collapses in the recent past. Oil, stocks, gold, commodities and real estate are a few examples.

The last liquidity bubble (before the one we are living through right now) peaked in late 2007. In 2008-09 that bubble burst, kicking off the Great Depression II. This crisis has impoverished more people than any in history. It has wiped out more wealth than any liquidity-bubble boom/bust cycle the world has seen.

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