It appears the stock market itself has become a psyop completely controlled by pools of virtual capital. My guess is that the apparently deliberate failure of “fiscal cliff” negotiations (a “crisis” which itself is a manufactured psyop) will be sold as the “cause” of the stock and bond market collapse which in turn will be sold as the “cause” of the collapse of the dollar. It’s a diversion. The federal reserve is the single most culpable institution in the collapse of the dollar, and its shareholders are well positioned to profit from it.
If you had stopped me on the street a few years ago and asked me what I thought would have happened in the stock, bond, foreign currency, and commodity markets on the day the Fed announced an $85 billion per month thin-air money printing program directed at government bonds, I never would have predicted what has actually come to pass.
I would have predicted soaring stock prices on the expectation that all this money would have to end up in the stock market eventually. I would have predicted the dollar to fall because who in their right mind would want to hold the currency of a country that is borrowing 46 cents (!) out of every dollar that it is spending while its central bank monetizes 100% of that craziness?
Further, I would have expected additional strength in the government bond market, because $85 billion pretty much covers all of the expected new issuance going forward, plus many entities still need to buy U.S. bonds for a variety of fiduciary reasons. With little product for sale and lots of bids by various players, one of which – the Fed – has a magic printing press and is not just price insensitive but actually seeking to drive prices higher (and yields lower), that’s a recipe for rising prices.
Then I would have called for sharply rising commodity markets because nothing correlates quite so well with thin-air money printing as commodities.
That’s what should have happened. But it’s not what we’re seeing. …