If that's a short horn bull, I'm a naval aviator!

Our economy is measured by GDP. Gross Domestic Product, which is the total dollar value of all final goods and services sold per year. One approach national accountant’s use is the "expenditure approach" for counting this. Using the expenditure approach there are four variables. Consumption, Gross Investment, Government Purchases and Net Exports (Exports minus Imports). In America about 70% of GDP is Consumption. This is what we spend each year with what we have left over after taxes. Gross Business Investment is about 14%, Government Purchases are about 20% and Net Exports is a negative 4%, meaning we import more than we export.

GDP is about 14 Trillion a year, so Consumption being 70% is about $9.8 Trillion a year. Those policy makers, whose job it is to control inflation /deflation and reduce unemployment use either Fiscal Policy or Monetary Policy to do their job

Those who use Fiscal Policy are members of the Federal Government. They have two options for doing the job. They can raise taxes and reduce government spending to shrink the money supply. Or, they can lower taxes and increase government spending to increase the money supply. The money supply is what we who are part of the 70% consumption group have available to buy goods and services with.

Those who use Monetary Policy are members of the Federal Reserve Banking System Central Bank, a privately owned bank that is regulated by but not under control of the Federal Government. They have three options for doing their job. TO SHRINK THE MONEY SUPPLY....They can raise the reserve rate requirement, they can raise the discount rate/federal fund rate, or they can engage in open market transactions by selling government securities (treasury notes, aka T-notes, T-bonds and T-bills). By reversing their actions on these three options, they will EXPAND THE MONEY SUPPLY.

EXAMPLE: When you deposit $100.00 in your checking account, if the RRR is 10% (reserve rate requirement) this forces the bank to put 10% of your deposit on deposit with the Federal Reserve Central Bank. They are supposed to loan out the other 90%. When they loan out the other $90.00 to one of you, and you deposit that in your bank, your bank must put 10% on deposit with the Central Bank, and then loan out the other $81.00. This is called "fractional banking" and it is how banks create money. If all of you went to get your money out of the bank at the same time, only 10% of you could get all of your money, or all of us could get 10% of our money. The rest of it is imaginary money or electronic money...it does not really exist. (IT's A Wonderful Life....Jimmy Stewart and the Building and Loan)

Point is, the lifeblood of our economy is the money supply. Very narrowly defined as M1, or all the cash, coins and checking accounts available for Consumption! M2 includes M1, plus all short term interest baring accounts which you can get your hands on quickly for Consumption!

The money multiplier is used by banks for creating money in their fractional banking system, (1 divided by the RRR equals the multiplier... or 1 divided by 10% equals 10, ...or for every dollar you deposit in your bank, they can create 10 more by loaning out the other 90%). However, what happens when banks decide it is too risky to make loans and much safer to make money by investing their deposits into the stock market. What happens is inflation in the stock market! Stocks go up in price for reasons other than earnings or performance. Ever since the 700 Billion TARP bale out of banks in 2008, the stock market has been surging. Since then, the Federal Reserve Bank has been putting Billions into the Banking system. 600 Billion Aka QE2 and 85 Billion a month aka QE3.

They have been buying T-Bonds from their member banks in the form of Mortgage Bonds. These are those bundled mortgages which had many foreclosed houses included in them, which put many banks into a state of being insolvent. Not only were banks making mortgage loans which went into default, they were also investing in those bundled mortgage derivatives that went upside down. So, in essence, the Central Bank has been creating new money, that does not really exist anywhere but on paper, or in the computer, to bail out their member banks. This has helped stabilize the housing market, but those deposits in member banks are supposed to trickle down into the economy, expanding the money supply, creating jobs. What it is doing is creating wealth or stabilizing wealth of the homeowner, and driving up prices of stock in the stock market, which also has a wealth effect for those who own stocks. With that wealth, they can afford to CONSUME more.

The challenge with wealth creation of this type is the extreme reduction of the MULTIPLIER effect. When loans are not made with deposits, because banks are sitting on excess reserves (bank reserves minus the RRR), or they are putting excess reserves into the market, there is very little impact for the multiplier. FRED, the Federal Reserve Bank web site http://research.stlouisfed.org/fred2/series/MULT, shows this started in 2008 when TARP was given, and has continued since.

Another multiplier is the Marginal Propensity to Consume each one of us have. We have a propensity to consume and to save. Added together they equal 1. If you earn 1,000 a week with a MPC of 90% then you have a 10% marginal propensity to save and a 90% marginal propensity to spend. Marginal means the next dollar you earn from zero going forward. We typically have a higher MPS as our incomes rise, meaning the more we earn the more we save. However, in this economy, most of us who influence the 70% of GDP number are spending at least 90% of what we earn. This other multiplier is found by dividing 1 by the MPS. In this case 1 divided by 10% equals a multiplier effect of 10.

Finally, when we go to the pump to buy gas or to the store to buy food and the price has gone up by 5%, do we buy less food or less gas? No. Those two items have a demand which is relatively if not perfectly inelastic, meaning we don't respond to a price increase or a price decrease...we generally buy the same amount. For those of us in the 70% consumption bucket of GDP, gasoline makes up about 2.1% of our spending or about $430 Billion a year. When the price at the pump goes down by 10% or about 30 cents a gallon it amounts to an extra $43 Billion a year for us to spend on something else. We will not buy more gasoline, we will buy something else. If we use the multiplier of 10 it means a $430 Billion impact on GDP....meant GDP just grew by 2.1%. Sadly, this multiplier impact works the same way in the opposite direction.

For those who do not know, 2% growth in GDP is the expected hoped for gain this year and each year going forward in these times. The increase in GDP hoped for by the actions of the Central Bank, using the wealth effect, will be wiped out with inflation in gasoline and or food. Food consumption accounts for about 3% of our consumption dollars, so you can see how the anticipated 4% inflation in food prices, with the multiplier impact, will further push us into zero growth in GDP going forward.

Fiscal Policy and Monetary Policy actors, expect us to believe their actions will increase the money supply, consumption, GDP and the job market, as fast as food and fuel inflation are shrinking the money supply, consumption, GDP and the job market.  Current monetary easing actions are continuing to shore up balance sheets for member banks, keeping interest rates low and further inflating the stock market.

The coming QE 4 is a green light for OPEC to raise fuel prices, soaking up those new marginal dollars.  Global demand for food, "in the know" investors and global weather challenges will continue to drive up commodity prices.  Inflation will remain within the 2% range desired by our Central Bank as we see further disinflation and deflation in most segments of our economy, balanced out by significant inflation in fuel and food.  The net effect on the money supply and GDP will be shrinkage, further loss of jobs and major growth in transfer payments to sustain those who will move from pulling the cart to riding.

Like Albert Winfield once said to the city banker who purchased the Albert Tilton farm from him. While unloading a truck load of cattle, which included a very large red bull, the banker told him the bull was of the Short Horn breed. A. W. laughed, spit out some tobacco juice and cried out, "If that’s a short horn bull, I'm a naval aviator"!

Beat in more ways than a farmer can whip a mule

The title was a phrase I heard my grandfather use on more than one occasion when he wanted to express his sentiment on an issue that was lopsided or appeared to be so. I guess when mules and draft horses were the primary energy source of the day, one needed to sometimes be aggressive with the whip, in order to increase or optimize output. It was also common to include voice and language enhancements in the optimization process. One story told was that the oxen or mule purchased from a neighbor would not respond unless the most fowl and vulgar language was used in a high pitched and high volume tone, in addition to the whip, to garner peak performance.

As we approach the next Presidential election and consider our positions, I hope we can find the lesser of the two evils for optimizing GDP growth through full employment and price stability. Neither fowl, vulgar and loud language, or creative use of the whip are acceptable conduct for optimizing output.

How well do we respond to the whip, regardless of how it may be used? Various segments of our society believe they have been under the whip since slavery was legal. Some, even though employed, feel their jobs are so output driven they do what they must, to avoid the whip. While the whip did work well as an incentive for mule production, so may have the carrot. The "carrot stick approach" is often referred to by Covey as he introduced us to win/win performance agreements.

Which political platform is win/win? Which offers empowerment? Even the best team of mules had to be placed in harness prior to engaging in the production process. Wall Street, large corporations, small businesses, all need regulation or harness, but all should expect a win/win agreement between the business entity and the public. Without harness, business entities cannot be counted on to deliver optimum results. However, too much harness is hurtful and constrains output to less than best results.

Like most issues, it is wrong to get completely on one side or completely on the other side. Somewhere in the middle is a range where win/win results are possible. Mules working in teams work much better than one working alone. A team offers synergy when one mule who enjoys being focused on the task at hand, is harnessed to the strongest of the team who may lack focus, yet creates the pace for the weaker more focused mule to follow.

So which political platform has the other beat? Of course, it would depend on the platform. As we examine our options over the next few months, may we be careful to place our personal needs at least in harness with the needs of our country. While one may find complete comfort with the platform of one party from a personal standpoint, will the policies of that party deliver the best win/win performance agreement for America?

Full employment and price stability are the two primary focuses of both the Federal Government Fiscal Policy makers and the Federal Reserve Monetary Policy makers. They use very different approaches. The one we have control over through the election process, the other we do not.

Fiscal policy that will expand our economy has historically been lower tax rates, which have always produced higher tax revenues, which in turn have facilitated the reduction of governement deficits. Lower tax rates puts more cash in our pockets and leads to more spending, which leads to the creation of more jobs, which leads to more of us paying taxes, even though at the lower tax rate. While taxing the rich sounds "fair", remember, the rich are often small business owners who buy new equipment, services and supplies as their business grows. Those purchases stimulate new jobs and new business start ups.

Harness and the whip are not the best way to secure long term output from our teams. Some harness is needful, especially when some mules lack integrity to perform without it.

Next time....another Albert Winfield Hinds quote will be revealed..."if that's a short horn bull, I'm a navy aviator".

Tit caught in the wringer

Tit caught in the wringer

I have been listening to countless hours of commentary and reading numerous articles regarding what is called QE1 and QE2, or quantitative easing #1 and #2, with QE2 set to end later this month. The 600B monetary stimulus the Federal Reserve Banking system implemented last November further expand the money supply and continue with an "easy" monetary policy. First, the money supply, aka M1. M1 represents all currency, coins and demand deposits (money in your checking accounts). M1 can be expanded or contracted through both Fiscal Policy and Monetary Policy. Fiscal policy (Federal Government) can use the reduction in tax rates or an increase in government spending to expand M1. Monetary policy (Federal Reserve Banking System) can lower interest rates, lower the reserve rate requirement, and or buy government securities. Banks within the Federal Reserve Banking System, which is a privately owned banking system, but regulated by the Federal Government, are required to put a percentage of the deposits made into a reserve pile aka the vault. Those required reserves might be 10%, meaning if you deposit 10K into your local bank, they must put 1K into the vault. The other 9K can be loaned out to your cousin, your neighbor, other banks, etc...If you go back to the bank and ask for your 10K, they will give it to you, but only 1K of it is part of your original deposit. The other 9K is coming from the vault and is 10% of 90K that was deposited by as other customers...if 100% of the banks customers went to the bank at the same time to get their deposits, the bank would only be able to provide 10% of the funds to those customers, leaving 90% of the customers money unpaid. This is known as fractional banking and it is the system in place at the Federal Reserve Banking System.

In 2007 and 2009 when gasoline inched up to over $4.00 per gallon, many of us found it difficult to pay our bills. I was driving a one ton van which had a 35 gallon tank. When gas was $1.75 a gallon it cost me $61.25 to fill it up. When gas reached $4.00 a gallon, it cost me $140.00 to fill it up. I had to fill up at least twice a week, so my cash flow decreased by $157.50 a week, or $630.00 a month! With that $630.00 I had been making improvements on my home, buying tools, going on dates with my wife, buying ice cream and doughnuts at the local Quik Trip, seeing movies, etc...oh, and paying my mortgage on time. Because thousands of us were in the same boat, we had to decide on paying our bills on time or continue to buy gas. We chose to buy gas so we could get to work to earn the money to pay what we could pay. We had to buy food, pay our utilities, etc...but we could let the largest part of our monthly budget go unpaid with minimal impact to our daily lifestyle, so we got behind on our mortgage and many of you eventually lost your homes through bank foreclosure. So many lost their homes that the value of residential real estate has dropped by over 30%. Historically, we used our home to grow our wealth. We bought our first home in 1976 for $21,000. By 1986 it was worth $42,000, and all we did was live in it. Our personal balance sheet (assets = liabilities plus owners equity) started off with a $21,000 asset, a $21,000 liability (we got 100% financing) and zero owners equity. In ten years our balance sheet changed to reflect the gains made due to "inflation" in the housing market. In 1986 we had a $42,000 asset, a $19,000 liability (the first ten years of a 30 year loan pays down the principle very little, most of our payments were paying interest on the loan during those first 10 years)and we had $23,000 in owners equity! We had increased our wealth from zero to $23,000 in just ten years without doing anything. I wish we could have purchased 100 homes when we bought that first home in 1976! We would have been worth 2.3M vs. $23K...

Our scenario was mirrored by all Americans from the end of WWII until the housing crash. The root cause of the housing crash was not "sub prime loans" to high risk borrowers, it was gasoline soaring to $4.00 a gallon and sucking the life blood out of our economy. What is the life blood? M1

Our bank was as happy as we were with the increase in our wealth. The house loan they made to us looked better each day as we paid our payments and the value of our house increased. We were able to go to the bank and ask for a 10K loan, just using part of the 23k of the equity in our home as security. But all of that has been inverted due to "deflation" in the housing market.

Many of us were greedy and we did get "our tit caught in the wringer" due to our greed. We tried to buy 100 homes and take the equity gains on 100 vs. being satisfied with our equity gain on our primary residence. Banks were greedy, they did make loans to less than credit worthy customers, but banks expected the housing market to continue to do what it has always done...which meant a house sold today would be worth several thousand dollars more next year. So they made loans which required very little or no money down and when many of you lost your discretionary spending capacity, due to high gasoline prices, you defaulted on your home loan...leaving the bank owning thousands of houses. The banks balance sheet went from having equity to no equity, then negative equity...Billions of dollars of liabilities with Millions of dollars of assets = Billions of dollars of negative equity = insolvency and bank failures by the score.

The Federal Reserve Banking System used QE1 to help its member banks remain solvent and keep our economic system in tact. History as quickly repeated itself! Again we see gasoline at the $4.00 per gallon level. Again our discretionary dollars have disappeared and we are faced with the choice of buying gas or food, or paying utilities or missing our mortgage payment. Already banks have thousands of residential property on their balance sheets and the price of gas is putting more of us in the position of losing our homes.

So the Federal Reserve Banking System implements QE2. Why? They say it was to reduce fear of deflation. Who fears deflation in the housing market the most? BANKS! They said it was to stimulate the economy by expanding M1. The Chinese and Germans say QE2 has weakened the value of the dollar...The Gold market says QE2 has weakened the value of the dollar. The commodities market (food) says QE2 has weakened the value of the dollar. A weak dollar is inflationary!

Using QE2, the Fed (Federal Reserve Banking System) has purchased 600B worth of government securities (Treasury Bills, Notes and Bonds) Those bills, notes and bonds are being purchased by the Fed from individuals, institutions, governments. The money the Fed is using to buy those securities did not exist prior to November of 2010. The Fed printed the money or created it electronically on their balance sheet, then they transferred those funds to those they purchased the securities from. When those entities who sold the securities to the Fed got their money, they did not put it in their mattress, they took it to their local bank....They made a deposit in their local bank.

With the fractional banking system the local bank has a reserve rate requirement of lets say 10% (remember?) Well, instead of putting 10% of that QE2 money in the vault and loaning out the other 90%, like the fox and the snake said they would do, they have kept more than the required 10% in the vault...WHY??? Banks reserves are at an all time record high! WHY??? Why would the Federal Reserve Banking System need to keep those reserves at an all time record high now, when our economy is in desperate need of economic stimulus that an increase in M1 would provide???

The Federal Reserve Banking System, a privately owned banking system, is protecting its member banks!!! Without QE2, further defaults on housing loans in both the residential and commercial real estate markets would put banks right back to where they were when QE1 was implemented.

Our banks have also gotten their tits to close to the washing machine wringer!! My dear grandmother Freda Knowler Hinds used to use that saying, and I remember her explaining it to me. Her mother actually got her tit caught in the wringer of their washing machine one day when doing the wash. I guess this was a common mistake as this was a very common saying in that era. With a washing machine wringer of that type I guess the only way to get your tit out of the wringer was to put it in reverse and turn it backwards.

I believe we will see a QE3 only if the price of oil stays up and gasoline remains at the $4.00 level, and the QE3 will be for the same reason as QE1 and QE2. Save our banks from becoming insolvent due to bad real estate loans which have gone into default and further driving down the price of existing homes on the books of the banks.

Today, OPEC announced it would increase output which would drive down the price of oil and lower the price of gas, but by the end of the day they changed their minds because they could not agree on the output level...this created further reason for speculators to drive the price of oil up, raising gas prices and increasing the propensity for a QE3. Higher gas prices means more housing defaults, more deflation in the housing market, and perhaps more insolvent banks. However, record bank reserves may be sufficient at this point to cover today's and tomorrows defaults, meaning QE3 could be passed back into the money supply (MI)and act as an economic stimulus as it was intended.

So if the Fed implements a QE3, does this increase in M1, with newly printed dollars, continue to create an inverse relationship between Gold and the Dollar, Food and the Dollar, Oil and the Dollar? Does it mean China, Germany and our other trading partners will continue to see a decline in the amount of goods America imports from them, hurting their economic recovery?

If OPEC follows through with an increase in output of oil, this increase in supply would normally drive gas prices down and explode our discretionary spending, (consumption)which would create new jobs and an economic recovery....more jobs means more tax payers and more tax payers means more tax revenues and more tax revenues means a reduction in our Federal Debt, and a reduction in our Federal Debt means a more solvent American and a stronger Dollar....normally that would be the case, but the present weakness in the dollar caused by the excessive printing by the Federal Reserve Banking System may have already taken us past the tipping point for a strong dollar.

Why has OPEC waited so long to consider an increase in output? Why now? Why now, only 18 months from our next Presidential election? Like I told one of my econ students recently. Don't take LSD and try to think through all of the ramifications associated with the economic possibilities in front of us...it could burn up your brain!

Who really holds the winning card? What is considered a win? Is the Federal Reserve Banking System holding all the cards? Is OPEC? Are the Oil Speculators, aka Snakes and Foxes? Does a Supreme Being? I am betting on the Supreme Being. We know there is an inverse relationship between the DOLLAR and the price of FOOD, Ceteris Paribus. What if there was an extreme shortage of Food due to floods, wind, drought? Would the value of the dollar keep the price of food from exploding?

If the Supreme Being is not in control of the weather, then those who control the weather are in control of our economic future because I believe it will eventually all come down to who gets to eat and who doesn't.

"A bucket of wheat, may someday be worth, more than a bucket of Gold".

Beware the intruder behind the door...

Early last Fall, I was awakened before sunrise, by a voice which said, "beware the intruder behind the door". My first reaction was to get out of bed, and quietly tiptoe around the house, looking behind each door in the "ready position". Finding nothing in either the house or the B & B (www.silverhind.blogspot.com), I went back to bed and started pondering the meaning of what I had heard. My first thoughts were, who speaks using words like "beware" or "intruder"? I don't. I then tried to reason with myself regarding what it means to "beware" and what the word "intruder" really means. "Behind the door" is simple enough, but in this case it must have a symbolic meaning, or the door was somewhere else, not inside my residence. I finally did figure out who the intruder was and which door he was behind.

My point in sharing this experience is twofold. First, never ignore impression, flashes of insight, dreams, or yes, even an audible voice. Know there is a higher power, and to have foreknowledge is to be forewarned. Personal revelation is possible if we live so we can be in tune with the network from which it comes..."can you hear me now"?

Second, beware (cool word)of covert operations and operatives, for they are everywhere present around us. The media, the government, the financial markets, where you work, where you play, even in your family. I am not saying to become paranoid, I am saying "keep your eye on the ball". Someone said, "it is better to be trusted than to be loved". I believe this is true. Having people in your circle who you can trust is truly meaningful. Beware, for there are those who are willing to lie, steal, or worse, if it meets their personal agenda. Trust, once lost, can almost never be regained.

Finally, the most dangerous intruder may be the one we let inside ourselves. Be careful not to become someone you were not created to be. Don't let the bad influence of others, or bad habits, take control over that once innocent child within you.

Watch your pennies and your dollars will take care of themselves..."the cornerstone"

My great great granddad Albert Webster Tilton did not coin this phrase but in the late 1800's and early 1900's he often used it, or so his grandson Albert Winfield Hinds did say.

If integrity is the capstone and productivity the keystone, then profit is the cornerstone to a free market system. Watching your pennies and dollars, the profit motive, is what makes the system go...as long as dollars are the "coin of the realm".

Today, the dollar is the reserve currency for most developed nations and emerging markets. Given the present economic climate, what happens if the dollar fails? Historically, economies which experience deflation are followed by a period of hyperinflation, followed by the collapse of their currency.

If the dollar was not the coin of the realm, what would replace it? Barter? Try to imagine an economic collapse with the failure of the dollar. What would you turn to? What would be your most important need? If you had to enter a barter system, what would you have to trade that others would need or want?

Could food become a valuable "coin"? My suggestion is for each of us to store as much non perishable food as we can afford. Budget something each week to put into a storage program. With inflation, the savings/return on what you have already stored will be better than any other. Eat what you store and store what you eat.

Start thinking like a Farmer....

Is there a Fox guarding the Hen House? "the capstone"

If PRODUCTIVITY is they keystone of a free market, then INTEGRITY is the capstone. In a free market system both the keystone and capstone are required for building a superstructure which will never colapse!

I was blessed to have been born into a rural community and to have spent my early years on a farm. One of my first memories is gathering eggs with my mother, Dorothy, when I was three.

We had a hen house where she raised baby chicks and where the hens would go to roost or lay eggs. However, the hens were free range which means they had the run of the entire barnyard, over 10 acres, where there were several other outbuildings. A smoke house for curing meat, two carriage houses, where buggies and wagons were originally stored, a hog house, a corn crib, a milk barn and the hay barn. There was also an outhouse...aka, johnny...aka, toilet room, where a small amount of corn cobs could always be found.

In all of the above structures, excluding the outhouse, eggs would be found. Then, like magic, we started seeing a reduction in eggs and chickens. The discussion at the morning breakfast table for several days was centered around who, what, where, why and how the chickens were disappearing. It was like magic. We would wake up each day to find fewer and fewer chickens.

Again, a lasting memory was formed, while looking out the back porch door in the early morning hours, when I saw a small red, dog like creature run by with a chicken in its mouth! I will never forget that moment or scene. Soon, all the chickens were gone and we were out of the egg gathering process.

Many are saying that for the past several years, "the Fox has been guarding the Hen House" on Wall Street. Regulators, what regulators? While the Federal Reserve has been watching out for price inflation via the CPI, they have neglected inflation in the equity market, where many have been storing their eggs. Did you know that SNAKES love EGGS?

I learned this when gathering eggs with my mom. On the west side of the hay barn we had a number of laying baskets and as part of our daily ritual would stop there to gather eggs. I will never forget the scream she let out when she reached into a box expecting to find eggs but instead found a very large black snake. The SNAKE had already swallowed all of the eggs in that basket.

The point or moral of this story? Don't put all your eggs in one basket...Beware of the Fox, he will kill your chickens....Beware of the Snake, he will eat your eggs.

Make Hay While the Sun Shines! The Keystone.

Any farmer/rancher knows how difficult it is to get a hay crop cut, baled and hauled to the barn without getting it destroyed by rain. Yes, rain destroys hay once it has been mowed. Hay must be mowed, then raked and allowed to dry out in the sun...once dry it is then ready to bale. Once baled it is again subject to rain damage. The large round bales have overcome this final rain issue due to the outside being destroyed but the inside staying dry and yet good.

If hay is not cut at the right time, the protein content of the crop diminishes greatly and it is protein which produces the energy livestock need for good health. Thus, the farm slogan, "make hay while the sun shines". Meaning, you need to get into high gear when the weather is on your side, if not, you risk tremendous losses in both quality and quantity of the crop.

Remember, just a short 200 years ago or less, our entire Economic System was Agriculture based. A safe and good way to measure your economic decisions is to think like a farmer...

All True Wealth Comes From the Soil! Do you see anyway for Greed or Unethical behavior to be a part of securing a good hay crop? No. It takes time and patience to make a crop. You first must work the land, then plant, then cultivate, then fertilize, then cultivate some more, then wait. You wait on the soil, the sun, the rain. Finally, when the time is right, you bust your rear to get a harvest in. It is a process. Once you complete it, you repeat it. Harvest is the final step in the production process.

"Make hay while the sun shines" is the keystone to capitalism, aka, PRODUCTIVITY. Those on Wall Street who were/are manipulating markets...Oil for example...lack integrity. Price inflation in the equity market which is not related to earnings may be the result of manipulation. Buyer BEWARE!

If the investment looks too good to be true, it is.