Germany's Stock Market is Telling a Wild Tale

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Originally published at: https://peakprosperity.com/germanys-stock-market-is-telling-a-wild-tale/

This week Paul Kiker and his wife are out celebrating their anniversary, so this is a solo Finance U.

As you know, I tend to think in long-form thoughts and I have a hypothesis I wanted to run by you which concerns the degree to which our ““markets”” are really mainly narrative-reinforcing operations conducted by the usual cast of insiders.

As a bonus for them, the markets also function as looting machines while they run, offering them the ability to grift dollars from the system that they can use to buy up real assets.

While I present a range of top-down economic and market-related charts, the whole can be understood from one of its component parts, the German stock market (the ‘DAX’).

While all of the major Western stock markets are currently smashing to all-time new highs, so is Germany’s:

Today’s green candle is one of the most vigorous in the past year. What is causing Germany’s stock market to smash to new highs? Is it robust underlying economic data? A softening of relations with Russia for cheaper future energy? A healthy employment situation?

In fact, none of these things are in play and yet Germany’s stock market – like those across the West – is powering unstoppably to new highs.

My explanation for this is that the West’s Central Banks and governments are busy shoving more and more cash and liquidity into the system and it simply has to go somewhere.

So, it finds its way into the asset markets.

Their interventionist policies are unsustainable, obviously, but they are quire popular among decision-makers and the ultra-wealthy because both are supported and enriched by these actions.

For their part, the media then covers the new highs with glee and pretends as if this means everybody is more well off, when the data could not be any clearer. The 0.1% benefits the most, then the next 0.9%, and everybody else has share the leftovers.

Meanwhile, the resulting inflation hurts the bottom 75% the most, and is the most regressive and unfair tax of them all.

But, meanwhile, despite the US system’s best efforts, gold and silver are sneaking higher and higher giving away the plans.

The largest concern? That the Fed organizes a rug-pull for the down cycle catching everyone off-guard after lulling everyone to sleep with their pattern of rescues. What if they don’t rescue this time and everybody is on the same side of the boat? Well, that’s crash territory and the benefit of a crash to them is the ability to use the panic to usher in CBDCs that nobody wants. It’s simply how they roll.

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Next year, the last week of September and the first week of October, both Paul and Chris will be celebrating Wedding Anniversaries (with their respective wives - not together) and Finance U will be cancelled.

Well deserved and easily forgiven.

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Chris, I am pretty much an economic illiterate. But it caught my eye about it being Germany. The globalists in Germany have been carrying weather exercises with their special weather generating planes in the Atlantic in the area and south of the hurricane storm areas coming off Africa. Do you think that could have any bearing? Perhaps being paid in stocks or money to put into stocks? The French were on the edge of Africa one day with their weather maker. Watching Monkeywerx on youtube last two weeks. He shows it. This storm is like a Katrina. Another man-made storm.

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Anyone got a screenshot shot of that day market vs night market silver price chart. I work offshore so I can only listen to audio at the moment.

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Interesting comment Chris made concerning his judgement about not getting
excited about the direction of buyers in the markets. My father worked in the KEISER Wilhelm Institute which included the likes of Einstein, Wilstätter and others. He always told me that in the stock markets, “One should always do the opposite of what the masses do”. Considering his age, intelligence and time period, I find the relevance amusing.

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The DAX40 does not represent Germany. It represents the 40 biggest German companies listed on the German stock exchange. Most of these companies like (VW, BMW, Allianz (Pimco), Munich RE, Bayer (Monsanto), BASF, Adidas, Telekom (T-Mobile)…) generate a lot of revenue outside of Germany. It might be better to look at the MDAX (Mediumsize) or SDAX (smallsize). Both are not at all-time highs. The might be the better indicators of how the „German economy“ is doing.

VW is also interesting because on of the german states has a 20% stake in the company and last year a „car hater“ of the green party joined the board of VW. Strange times we live in.
A 'car hater' joins the board of VW - by Jörg Luyken

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Hey, Volker the DAX40 is the chart used to push the everything is great Story. If I show the ASX200 we have a similar story, but the truth is not so great when you see empty shops in the main streets.

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Chris,
I’ve listened to your stock stuff a lot and you keep asking “why are the stocks going up when economies are contracting etc?”
Could the central banks artificially drive stocks up to lure more everyday investors.? Everyday investors equals more suckers for the Great Taking. More suckers in the stock market equals more CBDC candidates.

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Easily.

The computer programming necessary to drive things this way or that way is trivial. All one needs is access to the deepest levels of quotes to ‘see’ the landscape and then have an unlimited pocketbook on the backend to buy or sell this or that at the right moments. The vast ecosystem of programmatic algos will do the rest.

Also, no need to buy stocks or bonds. Just use options and futures instead, especially on the derivative indexes such as VIX, etc.

If all else fails, simply have your cut-out shell companies in the Caymens buy stocks or bonds.

A transaction-level audit of the Fed would reveal if such things were happening, but we’ve never had one and I we probably never will.

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I think, the German DAX Bull raging market is a mixture of:

  • extra loose monetary politics
  • the increasing belief that the energy transition is finally being a success. And Germany is leading this risky play. Never underestimate the Germans when they are with the back on the wall.
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Wut? that sounds weird as 2022 US tech company layoffs are hitting germany now. Although I cant say how many are international workers as those biggest companies are international. Extra loose? I thought -0.5% interest rate time was that, not now with 3%+ (that is with german and european loan amounts sizable amount vs salaries in monthly level)

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Do you have gut feeling of how much biggest german companies actually are of “german total revenue” (business terms), as money flows abroad when operation is abroad + biggest companies in europe have many big banks to do their taxplanning for them closing 0% local tax despite HQ is in germany. So net effect(to local economy) can be small despite huge numbers[referring to Ireland here, things look very nice on paper but it could even hurt economy when housing prices and other daily things go up a lot, but salaries not… thus daily operable money is very low, everything is just paper calculated asset values, leading to M2? indicator that money flow usually goes down over time and I understood that is most important metric in economy showing actually activity]. Medium sized companies, how big amount of jobs and also “revenue” in economy is that? I’d guess via 80-90% of total jobs that adds to much more significant than couple big corporations even with lower salaries than 10k euros/month bankers have. Perhaps this twisting is deliberate, always media looks these exceptions, outliers, not as a whole as that paints different picture. (afaik germany has strong tradition of small and medium sized companies, which also hire external non-family workforce, that’s why Im asking)

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A while back I watched documentaries in summer about Venice economic,finance center in medieval times. Curiously multiple things strike cord now, some 500-700 years later. So same playbook is in use in international (geo?)politics of economy. Silver and gold trade manipulation was old trick to subjugate country king to be poor and thus have to obey financiers. They even used religious movements in financial interests to stir up pot. Biggest difference is how fast compute,tech,communication is now but overall playbook is very similar.