To live and die in the age of market fundamentalism

Future generations will view our current system of exponential debt and deliberate market manipulation as farcical in hindsight. Mainstream economics has abandoned any semblance of rational thought, and instead embraced what is best labelled as market fundamentalism. The core tenet of market fundamentalism is that markets are efficient no matter what, even if they are deliberately ramped by forcefed debt-driven inflows. Since markets are unmanipulable, we should deliberately ramp them as high as possible. The promise offered by the gospel of the bubbleheads is alluring; if everyone puts all their money in the stock market index and leaves it there, over thirty years the money will grow thirtyfold. According to the bubbleheads, this thirtyfold increase in wealth will come without effort, with the long time frame eliminating risk too. Individuals, pension schemes and governments all enthusiastically converted to market fundamentalism based on this promise.

But if everyone puts their money in the stock market, expecting to cash out thirtyfold down the track, where exactly will those gargantuan amounts of money come from? The market fundamentalists never say, as there is no rational response to this question, instead referring to "faith" and "belief". At best, the bubbleheads invoke the coming of magic robots, technology that will somehow increase productivity and median incomes at some ill-defined point in the future. To support their absolutely nonsensical assertions, market fundamentalists point to the observed thirtyfold increase in markets over the previous several decades.

However, there was a very simple reason for the previous thirtyfold increase in markets, one that is taboo to mention for market fundamentalists, namely an exponential increase in debt forcefed into markets. In a debt based monetary system, the money created by increased debt will inevitably find its way into financial assets. After all, where else would newly created money end up? New transmission sources for debt-fuelled ramping of markets have emerged - margin lending for individuals, stock buybacks for companies, and quantitative easing for governments. As debt has increased, so has the market cap and power of financial institutions, with banks and big corporations tied ever closer to government, in what is effectively a fascist system. One of the main drivers of forcefed inflows to markets over the last several decades, that is seldom recognized even by the rational, is the creation of a private sector pension system.

Fittingly, one of the first places such a system was implemented was Pinochet's Chile, at the behest of Milton Friedman. By law, a portion of employee pay is forcefed to financial intermediaries, with a large proportion then put into stock markets. This has several effects. It provides an immediate massive boon to financial intermediaries, causing resources to be diverted from actual enterprise into the financial sector. The emergence of powerful financial intermediaries increases income inequality, creating a boy's club that set each other's wages, as assets are controlled by these intermediaries. Furthermore, the stream of forcefed market inflows provides a boon for those already owning financial assets - the first entrants to the pyramid scheme - as the inflows temporarily ramp prices. So everyone's happy! Except when it eventually comes time to cash out the promised thirtyfold reward, at which point the outflows cause the markets to tank. But by that point Friedman is long gone, jetted off after taking a healthy fee. And of course, the inevitable crash is blamed on the market gods by the bubbleheads. The solution? More debt and an even higher proportion of incomes fed to financial intermediaries, of course.

The core assumptions of market fundamentalism are completely ridiculous when clearly stated, which is why bubbleheads so often resort to obfuscation and jargon. Expressed in plain English instead of Latin, their creed is laughable. For example, according to market fundamentalism, the size of a given market has no impact on its expected return. So if you ramp a $1 trillion market to $2 trillion, using mandated pension inflows or other government intervention, this will magically make the companies comprising said market twice as profitable, with twice as high cashflows and dividends. Why on earth would that be the case? Because markets. According to the fundamentalists, the structure of the market has no impact on its efficiency either. So if you have a handful of financial intermediaries setting prices, with these institutions incentivized to keep prices up, prices will still be magically efficient and not manipulated. Because markets. Neither does the composition of the market matter. If the index gets filled with China Waste Corporation and Panorama Synergy fraud schemes and turned into a wretched hive of scum and villainy, this will have absolutely no negative effect on expected returns according to market fundamentalists. Because markets. The most ludicrous tenet of all, however, is that debt levels do not directly ramp markets. So if you double the world's money supply, and markets correspondingly double, this means you are truly twice as wealthy.

Human history is the tale of how 1% control and leach off 99%, and through the millennia, only the titles of the 1% controllers change. The witch doctors, high priests, fund managers and banksters have one thing in common, namely no objective empirically provable skill. As a statement of fact, psychics cannot empirically prove their purported powers. In exactly the same way, scientific studies show that fund managers cannot predict the future and achieve risk-adjusted market beating returns after fees, cannot invest any better than a random chimpanzee. This is not a "belief", it is a simple statement of fact. Yet to this day, the sheeple 99% persist - grotesquely - in yielding to a 1% that is provably lying. Perhaps this is in their nature, to be endlessly shorn and slaughtered through the ages. And what of those unfortunate few that understand the prevailing scam of their time? In Teotihuacan before the fall, in the last days of Rome, or during the current global debt ponzi. Cursed with helpless prescience, spat upon by gods and mortals alike, you are raped and driven insane.

The China Waste Corporation fraud scheme

Investorlink Group is an Australian criminal organization specializing in intermediating international securities fraud and market manipulation, as described previously in this blog post. The company mainly helps with the listing and deliberate ramping of Chinese fraud schemes on the Australian stock exchange. Such fraud schemes need no actual assets or operations before revaluation by the criminal cartel into ASX-entities valued at billions of dollars. Investorlink recently helped launch yet another revaluation fraud on the ASX, by backdoor-listing and ramping China Waste Corporation (CWC.AX).

China Waste Corporation purportedly is an environmentally friendly waste management company, through its interest in Cayman based shell company Harvest Champion and its subsidiary China Urban Mining Holdings Limited. But as the prospectus for the backdoor-listing admitted, none of these companies actually have any operational history whatsoever, merely "planning" and "aiming" to conduct business. According to the prospectus, the only asset held by these companies was purportedly $3m cash, to be acquired by issuing 628m shares of CWC in the listing.

A small investment cartel now controls almost all CWC shares and manipulates its share price. According to disclosure documents, the top twenty shareholders hold more than 97% of shares. Immediately after listing, the "market" cap of CWC was set at $230m by the criminal cartel controlling its share price. According to the ASIC, this was not market manipulation at all, but rather a magical market mystery. According to ASIC, the overnight transmogrification of $3m cash into a $230m asset was just a wonderful occurrence, a miraculous event that needs not be investigated by the regulator. More recently, this blatant fraud scheme has been ramped to a "market" cap exceeding $300m, and ASIC still does nothing about it.

There are several uses for inflated ASX shares. The criminals freely admit one purpose of these ridiculous listings is to gain "credibility". But is "credibility" something that ASIC should be willing to sell? Furthermore, manipulated shares can be used as collateral for borrowing, or used by criminal fund managers to misstate fund performance and fraudulently extract performance fees. Deliberately inflated smallcap shares can also be used to defraud the significant investor visa program, whereby corrupt Chinese officials and other criminals can buy permanent residency in Australia. Recent changes to this program have been designed to provide a boon to organized crime syndicates such as Investorlink.