The COVID-19 pandemic will reveal the truth that many already know. This truth is that the stock market is no longer the free market that some people once dreamed of. This market is manipulated by various actors, the Fed being the first.
It is no coincidence that the following adage is often repeated on Wall Street:
"Don't Fight the Fed"
The stock market is largely dependent on the monetary policy the Fed decides to pursue. When the Fed decides to adopt highly accommodative monetary policy, as it did in March 2020, you need to take into account and adapt your strategy .
In fact, if the Federal Reserve cuts interest rates to zero and decides to print fiat money out of thin air to conduct a massive asset purchase program, you can imagine the stock market rallying in the coming months. This has been happening since April 2020.
The Fed's monetary policy has pushed the stock market to record highs
The S&P 500 and Dow Jones are now at record highs:
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Such monetary policy by the Fed is not without consequences. We have been witnessing a spike in inflation in America for several months now. This inflation is above 5% and the situation will continue to continue, although the Federal Reserve has long refused to admit the obvious.
From now on, everyone on Wall Street has only one word on their lips: When will the Fed taper?
The tapering is the slowing of the massive asset purchase program the Fed has been conducting for months. If that tapering is approaching, the Fed explained in late September 2021 that it is not yet the right time , thereby responding favorably to the message sent by the financial markets.
Financial markets have loved these massive infusions of liquidity. It is difficult for the Fed to withdraw the fiat money infusion without causing the stock market to crash.
Some investors do much better than the stock market average
Some investors still do better than others. If they were to flip a coin to see if they would make a profit on Wall Street, these investors would almost always see the coin land on the right side.
Bloomberg Businessweek recently had a front page story on the activities of one of these insider investors in the financial markets. Jimmy Filler is a nearly 80-year-old man who made his fortune buying and selling scrap metal in Birmingham, Alabama.
According to TipRanks, a company that rates executives on their ability to execute timely trades, Jimmy Filler is “ the most successful insider in America ".
In fact, he is known for his incredible success in buying shares in companies he advises or invests directly. Of the 496 trades he has made since 2014 at ServisFirst Bancshares (Alabama), where he is a board member, and Century Bancorp (Mass.), where he is the largest shareholder, 75 percent have shown a profit three months after - late.
Of course, this kind of performance is a dream for the world's top stock traders.
These investors have access to non-public information that gives them an unfair advantage
If Bloomberg Businessweek takes Jimmy Filler's case for an article, he's far from the only one with better-than-average luck in the U.S. stock market. According to a TipRanks analysis, stock purchases by U.S. corporate executives outperformed the S&P 500 by an average of five percentage points between 2015 and 2020.
This is where one of the main limitations of the current system becomes apparent. Corporate executives like Jimmy Filler have access to non-public information that gives them a significant advantage over the general public.
In theory, however, US law governing domestic trade is clear. Under the Securities Exchange Act of 1934, corporate executives who abuse their access to such non-public information, either by using it themselves or by passing it on to someone else, can be charged with fraud and sent to prison.
The problem remains that identifying and prosecuting wrongdoing is extremely difficult, and on Wall Street, the fact that insiders trade on confidential information “ a secret has long been discovered ,” according to Bloomberg Businessweek.
While insiders like Jimmy Filler will always have a better overall picture of how their company is doing than others, a growing number of experts believe that many insiders make good deals." with more than luck or judgement ", the magazine adds.
Studies show that insider trading is rampant in financial markets and that no one—not regulators, not the U.S. justice system, not even the companies themselves—is doing anything to stop it. That's despite calls for reform from lawmakers like Democratic Sen. Elizabeth Warren and Republican Congresswoman Elise Stefanik.
The general public no longer wants this biased market and sees in Bitcoin a fair world full of opportunity
This has led to a growing sense that the market is biased in favor of an elite. A market that does not allow the average person to take advantage of the same opportunities as a certain minority of investors who win almost every time.
From that point on, these frustrated investors had to turn to a more egalitarian world where there is no such thing as a hacking strategy. This honest world is the Bitcoin world . Bitcoin belongs to all its users and no one is more important than another in this world.
Also, no one has more information than others in the Bitcoin world.
Since Bitcoin treats all its users equally, it seems logical that more and more investors are choosing Bitcoin over investing on Wall Street. A way to participate in the emergence of a new world while having a real opportunity to make the fruits of your labor grow.
All of which the current system no longer allows the majority of Earth's inhabitants, whether in America or elsewhere. This awareness will continue to grow in the coming years, which will be of great benefit to Bitcoin, which can give you incredible guarantees.
The most important of these is that 1 BTC today will always equal 1 BTC in 21 million units in the future. It allows you to move forward with confidence in a world where everything moves so fast and human arbitrariness causes so much damage.
Bitcoin redresses the balance in favor of the many.