Hey, stock market investors!  When members of the Federal Reserve are graphically expressing worry about the market, you’ve got to take it seriously.  And this news, my friends, is serious if you’re a stock investor.  I’ll tell you all about it right now.  I’m Bryan Ellis.  This is Episode #202.

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Hello SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like you!  Today’s show has one purpose:  To help YOU make great investments that are simple, safe and strong!

Let’s get started with today’s installment of Wisdom of the Ancients, where I share with you a saying, quote or Proverb that has stood the test of time and conveys truth to which you and I as self-directed investors must pay close attention.  Today’s proverb says this:  “Those who give to the poor will lack nothing, but those who close their eyes to them receive many curses.”

What does this mean to you?  To me, it means that it’s wise to live in an “others-focused” kind of way.  In other words… think of the needs of others… specifically those who are destitute.  Do you believe that the wealth you’ve accumulated was given to you solely for your benefit… or maybe, just maybe… is the reason you have that wealth to give you the chance to wisely steward resources that can be used to feed the hungry, cloth the naked and heal the sick… along with, of course, taking care of yourself and your loved ones?

That’s what that proverb means to me.  What are your thoughts?  I’d love to hear them.  This is episode #202, so you can stop by SDIRadio.com/202 – the number 2 – 0 – 2 – and share your thoughts in the comments section.

Now, on to some financial markets analysis.

The stock market is doing pretty well these days, isn’t it?  It started the year by continuing a big plunge that began late last year, but sometime in February, the direction turned and now the market is actually up for the year despite the earlier fall.

And for those of you who are in stocks, that makes me so happy!  I hope for the very best for you at all times.

But there’s cause for alarm if you’re a rational thinker.  You see, in Episode #200, which you can, of course, hear by visiting SDIRadio.com/200, I told you that the rules of capitalism are no longer the governing rules for the actions of this market.  In a healthy economy, it’s the economy itself that determines success or failure of stocks.

That’s not how things are working right now.

You see, for the past 20 years or so, the one factor that has had an outsized influence on stock prices is the Federal Reserve, a group of bureaucrats who are tasked with establishing monetary policy for the United States.  There would be precious little need for specific monetary policy if our money actually had intrinsic value.  Alas, our money is based on nothing more than confidence in our government and where the value of your money is concerned, the part of the government that decides, rather directly, what your money is worth, is the Federal Reserve.

This is important – critically important, actually – for you stock market investors.  Here’s why:  The Fed has, for the past 2-3 decades, taken as a central part of it’s mission to maintain the apparent health of the economy as measured by the U.S. stock market.

Over and over again, the Fed has intervened with the specific intent of “propping up” the economy generally and stocks specifically.  Remember the bailouts that happened as part of the great Recession a few years ago?  That money came from the Fed.

So for many years now, the Fed has been desperately using every trick in the book, like bailouts and interest rate manipulation, to keep the stock market high.  And do you know what?  Generally speaking, they’ve been very successful.

But my friends… you can’t catch fish in a dry pond.  And the Fed is out of tricks.

Note that it’s not me saying it… and it’s not just one person saying this.  But the MOST NOTABLE person sounding the alarm is none other than Richard Fisher, former president and CEO of the Dallas Federal Reserve Bank, one of the big branches of the Fed.  Fisher ran the Dallas fed for 10 years, and is currently a senior analyst at Barclay’s.  He’s a guy that’s able to speak with authority about the Fed’s role and growing impotence as a force for “good” in the market.

Fisher was on CNBC just this morning and made a very interesting comment, and the link to that interview is on today’s show page at SDIRadio.com/202.  Fisher said, essentially, that there’s nothing left the Fed can do at this point… they’ve used all of the arrows in the quiver.  He says that the Fed is “living in constant fear of market reaction and that is not the way to manage policy.”

That’s sobering.  If the Fed exists as a reactive force to the market, and if the Fed has already used up all of the tools at it’s disposal, then that’s pretty bad.

But if you take it a step further and believe, as I do, that the market run-up in stocks in the past 10-20 years in stocks is not just because the economy has been growing, but also largely because of manipulation of the capital markets by the federal reserve, then the fact that the Fed is in a reactionary mode and is wholly out of ammo is even more terrifying.

Look, I’m not predicting an immediate stock market crash.  But I ABSOLUTELY believe that the foundation of the stock market is like shifting sand… it’s a house of cards.  If you get out soon, you’ll be one of the people to have successfully “gamed” the biggest Ponzi scheme in the history of the world.

Who knows… maybe I’m wrong.  Maybe the part of the market that actually does reflect the performance of the underlying companies, and the condition of the broader economy… maybe that part of the market is what is being reflected in today’s stock valuations.  But part of me – the skeptical, “protect the money” part of me – thinks otherwise.

What about you?

Share your thoughts with me at SDIRadio.com/202!

That’s all for today.  A lot of you have been emailing me privately, asking our private equity funds.  So in the next episode, I’ll tell you a bit more about that… and that will be well timed, as we’re now at the end of Q12016, with some results to report.  Let’s just say that I’m pretty proud of what’s happened.  Hehehe

So be sure to get notified about the next episode of SDI Radio by being on our private discussion list which you can join by texting the word SDIRADIO with no spaces or periods to 33444.  Again, that’s text the word SDIRADIO with no spaces or periods to 3344.

My friends… invest wisely today, and live well forever!

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