A populist market uprising led by millennials from Reddit on the Robinhood stock trading app has seen the financial elite close ranks against them. As founders of a company dedicated to building and owning wealth independent of Wall St., we take note when people think for themselves and work within the rules to profit even if the system might be tilted against them.
Robinhood stepped in and prohibited their clients from buying GameStop shares after the shares increased over 8,000%. In all our years of working in the financial industry we have never heard of brokers pulling the plug on their clients because they were making too much money. Big Wall St. hedge funds had bet the stock would decline, so they were losing billions of dollars as it continued to rise.
The only difference this time is who the clients are: everyday people on apps like Robinhood aren’t supposed to stick it to the big boys. As one commenter said: “People who go to Davos aren’t supposed to lose money to kids from Denver, but last week they did. That’s why the financial establishment reacted so strongly”.
But perhaps financial journalist Matt Taibbi, an expert in the details of the serial Wall St. bailouts, said it best: “The only thing “dangerous” about a gang of Reddit investors blowing up a few hedge funds is that some of us reading about it might die of laughter. That bit about investigating this as a “pump and dump scheme” to push prices away from their “fundamental value” is particularly hilarious. What does the Washington Post think the entire stock market is, in the bailout age?”
It’s not clear why the US government allows hedge funds to engage in every kind of financial speculation, but now does not allow ordinary Americans to own certain shares because they are appreciating too quickly.
Next stop for the populist train: precious metals?
In a previous blog post we discussed how the U.S. Department of Justice indicted J.P. Morgan for manipulating the precious metals markets for more than a decade through abusive short selling practices:
A widely-read post on the Reddit group where the GameStop drama is playing out suggested that the next target should be the precious metals markets, specifically silver (the post has since been removed).
But the sentiments being expressed elsewhere on Reddit echo many of themes we have covered here at Rush.Gold for some time.
At its core we think the story is exceedingly simple: economic, financial, monetary and regulatory policy has favoured the most fortunate in society and has exacerbated the wealth gap around the world, but with technology and information people can act independently and in their own financial interest.
The Great Reset. Really?
In a closely-related development, the billionaires and pundits at last week’s World Economic Forum espoused their so-called “Great Reset”, where in their words “you will own nothing, and you will be happy”:
We built Rush.Gold to enable people to own and use one of the world’s premier assets simply and quickly, just like we are certain that the majority of the WEF participants do.
Rush.Gold is the best place to build your stake in the ownership society.