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The Third Mandate

by Gormack on June 28th, 2016

Describing the financial crisis of 2008 George W. Bush famously observed that “the market ceased to function.”

But “the market” is nothing but a macro level manifestation of human behavior. It does not “cease to function” although it may fail to follow a script.

The script in 2008 was written by the Financial Elite and by its rules Markets are simply not allowed to purge themselves of toxic assets: that would bring the authors of the crisis to account. Instead creative financial engineering pushed the consequences from Wall Street onto Main Street.

But the creativity didn’t stop there. Ever more brazen actions followed and it soon became clear even to those outside the circle of privilege that something was going on. Things felt rigged. But by who? To give them a name lets call them “Plunge Protection Team”. Some uncharted, unelected entity or entities not meant to be known or understood.

Precious metals have been manipulated for years, of course; remember the Hunt brothers in the seventies? Bad, but their malfeasance in the silver markets are dwarfed by what’s possible in the age of Derivatives! Paul Craig Roberts published a great exposé on an attack on gold that took place on the New York Comex in 2014:

But Manipulations certainly don’t stop at Metals: “Interventions” in the Securities markets have become equally pervasive and equally creative! Charles Hugh Smith posted a great piece on how the VIX is “monkey-hammered” to keep sky high valuations afloat.

The “whatever it takes” madman of the ECB is buying everything in sight, corporate debt, junk bonds, with funny money!

It goes on and on leading an exasperated David Stockman to declare “Honest, market-driven price discovery is dead as a doornail!”

In age Dark Pools, off-the-books Derivatives, non-GAAP reporting, transparency is dead as well and the Fed, beyond the pale of any conceivable constitutional legitimacy, has declared for itself a Third Mandate: “A stable and rising stock market”

Most troubling of all is that the Wealth Management crowd has bought into this. Earnings, Savings, Productivity are irrelevant! Damn the Fundamentals, Monetary Policy is the only Mantra!

The rampant corruption of the free operation of Markets is wrong, dangerous and doomed. Soon, for we are in the end game, it will come undone.

Natural Law will awaken. He will be angry, and he will be hungry!

From → Crime, History Speaks

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