“Shocking Truth” About Policy, Central Banks, and Markets

Central Bankers are the source of the instability they themselves are supposed to remedy.

Central Banks are supporting mind boggling leverage in the system to fuel market support, compounding the instability.

Central Banks then “solve” that problem too – Market Intervention lowers volatility and keeps the equity “miracle” rally alive. 

Swiss National Bank purchased $17bn equities just in Q1 2017.

“What is happening has nothing to do with real markets or real supply and demand. What we are seeing is governments trying to obfuscate their total mismanagement of the economy and the currency”

Meanwhile Asia only wants physical gold which takes time to source and buy

“​Western Investors should mirror what the east is doing” 
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Central Bankers are the source of the instability they themselves are supposed to remedy.

“We are probably not going to forecast the next financial crisis, nor are we going to forecast the next recession.” – Gertjan Vlieghe, in evidence to the Treasury Select Committee, 20th Feb 2017

“Mr Vlieghe, who is a member of the Bank of England’s Monetary Policy Committee has effectively admitted that there is no point to the Bank pursuing its monetary policy, because it is impossible to judge the outcome.

There are good reasons for this, and they do not lie in ineffective econometric modelling, as commonly believed. Rather, they lie in the flawed economic concepts behind business cycles, which have their origin not in free markets, but in the expansion of money and bank credit. The author of this paper demonstrates that the source of regularly occurring cycles of boom and bust is monetary policy itself.”

https://wealth.goldmoney.com/research/goldmoney-insights/business-cycles-are-credit-cycles

The  Bank Of England’s research has internally accepted this point as brilliantly explained further by Steve Keen here,

How Debt Matters. Many Countries Face Either Crisis Or Stagnation.

However, this still has not changed policy action, presumably because the problem has by now gone too far to turn around! Instead of indentifying and addressing this huge problem Central Banks are now doing whatever it takes to keep the deeply flawed system going.

 Central Banks are supporting mind boggling leverage in the system to fuel market support, compounding the instability.

 

 

 

 

 

 

 

Weekend Reading: Sentient Illumination

Central Banks then solve that problem too – Market Intervention lowers volatility and keeps the equity “miracle” rally alive.

Swiss National Bank purchased $17bn equities just in Q1 2017.
 “The answer was revealed on Friday when the hedge fund known as the “Swiss National Bank” posted its latest 13-F holdings. What it showed is that, as rumored, the Swiss National Bank had gone on a record buying spree in the first quarter, boosting its total equity holdings to an all time high $80.4 billion, up $17 billion from the $63.4 billion at the end of 2016, the biggest quarterly increase in “AUM” in history.”
You might well ask what buying $17 billion of equities has to do with preserving the integrity of the Swiss Franc. Obviously nothing! Central banks are now acting in concert to intervene in favor of equities. The Swiss National Bank’s purchases of Apple alone has contributed to the recent new highs in the Nasdaq!

http://www.zerohedge.com/news/2017-05-06/mystery-central-bank-buyer-revealed-goes-q1-buying-spree

Egon Von Greyerz explains:

“What is happening has nothing to do with real markets or real supply and demand. What we are seeing is governments trying to obfuscate their total mismanagement of the economy and the currency. We are also seeing bullion banks leveraging their clients money by 20-50 times in order to stop gold and silver paper holders from calling their bluff and asking for physical delivery. We know and the banks know that the day they will need to come up with real gold and silver bars, it is game over. They don’t have enough physical gold or silver to cover even a fraction of their paper shorts. Between futures exchanges, bullion banks, including precious metals derivates contracts, there are hundreds of ounces of paper gold and silver outstanding for every ounce of physical backing. 

The problem is that it is not only the bankers that are the culprits in this game. No, governments are just as culpable. Western banks officially hold 30,000 tonnes of gold. Virtually no Western central bank has ever had a physical audit of their gold. The US had their last audit during Eisenhower’s presidency in 1953? Meanwhile, in the last few decades Western central banks have been liquidating a major part of their gold holdings. For example, the UK sold half of their gold holdings at the end of the 1990s and Switzerland sold over half. Norway sold ALL their holdings in the early 2000s.” 

Apparently, Canada has also sold all its gold reserves

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http://www.zerohedge.com/news/2016-03-03/its-official-moment-canada-has-no-gold-reserves-left

Meanwhile Asia only wants physical gold which takes time to source and buy

 

 

 

 

 

 

 

 

 

 

Greyerz – Shocking Truth About What Is Really Happening Is Being Hidden From An Unsuspecting Public

“​Western Investors should mirror what the east is doing” 

It should be clear that there is no longer any substance to western economic policy, just a series of exponentially accelerating distortions with no sustainable endgame. Asian policy makers have long been aware of this, and are preparing for the next financial system. Western investors need to start preparing too, and currently have ideal circumstances to do so, but it is unclear how much time is left, as the cracks in the system grow and western central bank policy increasingly mimics Alice in Wonderland.

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