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The Great American Pump And Dump

Here is a useful definition straight from the Financial Industry Regulatory Authority (FINRA) web page which describes several different types of scams investors need to be wary of.

This scam, the “pump and dump”, has been around forever and anyone who’s ever been involved in investing has heard about it. What people may not have considered is how large such a scam could feasibly grow if enough “special interests” were to get involved in a coordinated fashion.

Here’s the FINRA definition:

Pump-and-Dump — in which a fraudster deliberately buys shares of a very low-priced stock of a small, thinly traded company and then spreads false information to drum up interest in the stock and increase its stock price. Believing they’re getting a good deal on a promising stock, investors create buying demand at increasingly higher prices. The fraudster then dumps his shares at the high price and vanishes, leaving many people caught with worthless shares of stock. Pump-and-dumps traditionally were carried out by cold callers operating out of boiler rooms, or through fax or online newsletters. Now, the most common vehicles are spam emails or text messages.

These fraudsters would, of course, not be expected to simply “dump their shares” but they would also likely build a massive “short” position to enable further profit from the wholly-predictable crash that inevitably follows such an operation.

Here’s my question: What do you call an operation where high-level financiers and government overseers maliciously “lock-on” to an entire country and orchestrate a similar strategy as the classic “pump-and-dump” described above, through a carefully controlled and coordinated manipulation of government policy, data, and information, the mass-media, tax laws, central-bank debt creation, free-market destruction and privatization (monopolization) driving the systematic dismantling, unbundling, and liquidation of the nation’s productive asset base – extending the “pump-up” phase of the operation through 7 presidential terms?

Isn’t this PRECISELY what’s been done to our country in the 1982 – 2007 period?

Now that you’re busy chewing on that one, what if the same operation were exponentially increased in scale to include most if not all of the world economy?

By their acts we shall know them.

Think about it and leave your comments. I’d be interested in learning how you feel – as would many others.

2 Comments on “The Great American Pump And Dump”

  1. #1 rpm
    on Mar 4th, 2009 at 12:15 pm

    Very interesting analogy. However, in our current worldwide fiasco, I believe that the operatives with their “models” actually believed they were creating product. The problem actually arose when these “quants” became ruled by the electronic machine that they had programmed and ceased to acknowledge the machines lack of ability to reason. And, by extension, just a higher level of the “entitlement” psychology that has been foisted upon the American psyche. And yes, I do believe there is a “world order” in place that is designed to keep the masses at bay, in this case, by keeping them poor and defeated, in order to maintain the control by the “Rothchilds” the “Goldsmiths” the “G-7/8” the “G-20”, however you chose to title them. There is an ongoing challenge to the possible manipulation of the gold market by JP Morgan and Barclays. Of course, the regulators, CFTC turn a blind eye because any truth to this allegation would blow apart the complete machinations of our beloved Federal Reserve Bank, which just so happened to be forced into place by the “Rothchilds”. Your thoughts?

  2. #2 David
    on Mar 4th, 2009 at 6:08 pm

    Does a tooth on a gear hidden deep in the inner-workings of a fine Swiss watch know that it’s part a watch? Probably not. But it still plays its prescribed role in keeping time and moving the watch-hands forward.

    I suspect a similar state of mechanical mindlessness was brought about by the substantial paychecks and bonuses handed out to MBA’s and their ilk. Don’t ask, don’t tell. Anything that pays this well – well, it’s ALL GOOD – they think.

    As a person who’s spent decades in and around finance, I’ve often bristled when I heard the word “product” used in conjunction with financial “creations”. For some reason, it just seemed to me to demean the word product by attaching it to an obvious intangible, almost imaginary creation such as a contractual financial instrument or security. Now we can see that many of these products truly were imaginary, except for the debt and damage they’ve left behind.

    Obviously, I agree that there exists a small group of people who assert “substantial overarching influences” in the financial and political world; people who seem to be “names mostly without faces” who inhabit the shadows and live in faraway castles…somewhere…in between appearances at the policy meetings you mentioned above. However, I regret to say that I view that more as a subject to be tossed around over a beer than one to be introduced into my blog.

    That said, “The Creature From Jekyll Island” book would be a good primer on the subject of monetary power structures (at least in our country) for anyone who’s interested as would a Google search on the GATA lawsuits.

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