Remember the dot.com bubble? How about the housing bubble? If you are old enough you can probably even remember gas rationing. In the increasingly more transparent manipulation of markets, the biotech bubble is now set to pop.
The dot.com bubble may not have affected you, but if you made it through that one unscathed, then you may have been bruised and battered by the housing bubble – even if you weren’t part of the mortgage scam, which mainly targeted the poor but affected the entire nation, since bank bailouts were largely funded with the idea of ‘people’s inability to pay’ used as a scapegoat, though big bank fraud was really to blame.
Pump and Dump
These scams can be hard to keep track of, let alone understand, but they are all based on a single premise – pump and dump. An industry is inflated as the next best thing – and puffed up to such a degree, even the most level headed among us think we’re missing out if we don’t invest, also called the pump. Then prices are manipulated, the one percent that run the entire world push a few buttons, and everything is devalued – that’s the dump.
If you haven’t noticed, the biotech industry has been heavily pumped lately. We’ve been inundated with press about genetically modified this, and gene-edited that. From GM wheat trials that fail to the tune of several million dollars, to GM corn being refused by China, the writing has been on the wall that the biotechnology dump is just around the corner.
In fact, the Zero Hedge website pointed out many months ago that one of the sectors which was “substantially stretched” in this country was biotech:
Nevertheless, valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year…
Equity valuations of smaller firms as well as social media and biotechnology firms appear to be stretched, with ratios of prices to forward earnings remaining high relative to historical norms.
Matt Taibbi, one of my favorite journalists for Rolling Stone, talks about this phenomenon with great acumen in an article titled, The Great American Bubble Machine.
As he so eloquently points out, “Goldman Sachs is everywhere.” He continues:
The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.
Though the banks did it with another type of ‘investment,’ biotech companies take advantage of the same strategy.
They sell GM food and the chemicals required to grow them to farmers throughout the world, causing them to become dependant upon patented seed and proprietary chemical cocktails. Since many farmers initially bought the propaganda that they were “helping to feed the world” and could “increase yields” or “fight weeds,” they bought in. They put their investment in GM goods. We all bought in, and when I say we, I mean the world in general, though some of us did it kicking and screaming.
Then, the stock prices start to go up – this is the bubble. Though he’s talking about mortgages, he could be talking about anything – from barrels of oil to GM soy. Taibbi explains:
The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased.
Check out the evidence:
Monsanto stock prices in the past five years have gone up, despite grassroots efforts to promote divestment. So have the stock prices of Syngenta, Dow, and Bayer.
Overvalued? That’s an understatement.
These companies have single handedly caused super weeds, super bugs, and farmer suicides in India. The WHO just called one of Monsanto’s biggest selling chemicals “probably carcinogenic.” That’s the same chemical that their inaugural crops were developed for – thus the name, Round Up Ready. There is no evidence that GM seed yields more crops, and a large part of the world, including Russia, won’t even allow their import any longer. The biotech bubble is ripe, and its about to pop like gum gone rancid.
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