A hallucination is a fact, not an error; what is erroneous is a judgment based upon it.

Bertrand Russell

We will at some point in time publish a full in depth article in terms of how Central bankers have been actively employing psychological strategies to deceive the masses for generations. In essence, central bankers have been recreating reality, and the sad part is that the masses now assume that this altered reality is the new norm.  We are going to illustrate this by highlighting excerpts from several past market updates.  These excerpts should help shed some light on how central bankers very effectively use this simple, but highly effective strategy to recreate reality.  A lie is only lie if you discover you are being lied to; until that moment most actually assume that they are being told the truth..        

When you control the bad and the good news, you control the outcome of the game.  How high will this market soar? Well to issue very long term targets would be a waste of time as the situation is very fluid; meaning that this market will go as high as the masses allow it to go. Market Update May 17, 2015

When you think logically and or use old parameters to gauge this market, every single bone in your body probably screams out that this market should crash and burn. That is true, but what is also true is that as nothing is real, logic has no place when it comes to the illusory. How can you use logic (which is based on using real and compelling data) to judge an event that is illusory in nature? Every statistic imaginable has been, is being or will be manipulated to satisfy whatever picture the manipulators want the masses to believe in. It takes two to tango, one to cry and three to have a party, thus the crowd is as complicit in this game as are the manipulators. The most likely outcome is that the markets will trade higher than anyone expects as long as the trend remains up. We also feel that the Dow will experience at least one 10% correction and possibly as much as 20%, as it has been a long time since the markets let out any decent amount of steam. This healthy correction will have the bears growling with satisfaction as they finally feel vindicated; instead of banking their gains, they will open up more shorts, and watch the small profits they finally locked in vaporize, and add to their already large losses. On that note, we have evaluated the situation in Ukraine, and we feel that for the risk averse, buying properly in Kiev and or one of the large cities makes for a great long-term investment. Every disaster is nothing but opportunity saying “Hello,” most slam the door and run, instead of responding in kind.

What we have learnt over the years is the following;

  • There will always be room for another massive disaster.
  • Stress is the most destructive force in the universe (at least as far as living things are concerned). Therefore, if you are part of the living dead, then this probably does not apply to you.
  • The best and most effective trigger for stress is fear of the unknown. 99% of humans know nothing that could be termed as relevant, and or the little that they know is more destructive than useful. Most humans selectively choose their stress (poison); if you can selectively choose your poison, you can also choose not to ingest anymore of it. Hence, the disease and the cure lie within your own hands. Do something about it or someone else will and the outcome will not be the one you wish, want, or hoped for?
  • There will always be fear mongers warning you that the end of the world is nigh (so far their record is dismal for the world has not ended). Your best option is to view their dire warnings in the same light as the ravings of a lunatic.
  • There will always be people who say I wish I bought when the markets were falling apart, but when that situation finally presents itself, these very same individuals will be the first to head toward the exit.
  • Ironically, people worry about dying, instead of focusing on how to make each moment of this finite life more memorable. Dead men tell no tales because, the living are much better at it.

The strategy now used by the central bankers and top market manipulators is becoming more psychological in nature. The focus is on altering the perception. Once the perception is altered it does not matter what the reality is for a new alternate reality has been created.  This alternate reality will replace reality and remain valid until the masses manage to break free from its hold.  For months now, the Fed has been giving hints that it was going to taper off its $85 billion a month program, but when the markets reacted badly, it always backed off.  However, this time the markets are holding up fairly well; it appears that they have priced in the fact that the Fed is going to start looking for a way to cut back on this program. In this sense, the markets are holding up rather well and one would have to say that they are now actually climbing up a wall of worry.  Market Update Dec 12, 2013

The perception is changing; the masses are now becoming optimistic thus unless the trend changes we can expect the markets to rally even higher. One other thing to understand is that even though the rally in the markets has been artificially induced, the markets have actually recently issued “a true bullish signal.”  .  What is this signal you ask? Well, both the Dow and SPX are trading at new highs. A true bull market is not in session until the old highs have been taken out.  9 out of 10 times when this occurs the market rallies significantly from the breakout point; the breakout  point in this case is roughly 14200 (the old 2008 high).  Market Update Dec 12, 2013

Perception is everything, and not looks or money. If you can alter the perception, then you can recreate any reality or alternate reality you want. It appears that the breakout to new highs was indeed a bullish signal. This was not an easy call to make given that the markets had risen so much over such a short period of time.  Now that the Fed has seen how easy it is to recreate reality, watch how the level of brain washing will increase exponentially. People that actually use common sense will start to feel like aliens in this world, for the majority of the populace will be operating in an alternate reality. You won’t have to watch the TV series the living dead; you will start to run into them everywhere soon. Welcome to my World said the spider to the fly, to which the fly responded, which one.

The new reality is that the mom and pop investor has just jumped into the market, and they have been sitting on the sidelines for a very long time.  They have also been finally brainwashed into accepting the alternate reality that all is well.  On that basis, we can expect the markets to rally much higher before they finally run into a brick wall.   Market Update Dec 12, 2013

Conclusion

Central Bankers Recreating Reality and bringing on chaos, could be viewed as something terrible, if you take the good Samaritan angle……… The observer’s angle tells you to understand it, and then find a way to benefit from it.  The phrase don’t fight the Fed was not coined without reason.

 

It isn’t safe to sit in judgment upon another person’s illusion when you are not on the inside. While you are thinking it is a dream, he may be knowing it is a planet.

Mark Twain

 

Sol Palha

Head Technician at www.tacticalinvestor.com