The annual meeting of the money elites is being held at Jackson Hole Wyoming with an expected “statement” afterward. “Expect” that this statement will be of the sort we have seen many times in the past where “cooperation” amongst central banks and nations is “imperative”. “Cooperation” at this point is total horse$#@%. There has been nothing but cooperation for at least the last 4 years and look where it has gotten us. In fact, the more they “cooperate” the further down the rabbit hole we have gone. “Cooperate” by the way, is code word for manipulate, rig, falsify, push, pull, steamroll or whatever other verb you would like to use. The more that they “cooperate”, the further from the truth our markets are and the more difficult it becomes to decipher “value”.
We of course will hear from Ben Bernanke also. I have heard both sides of the argument that he will or will not announce further QE or whether or not he just offers a carrot. I personally don’t believe that he will announce more QE, rather he will go with the tried and true, tired and old, “the Fed stands ready” to open the fire hose whenever it is deemed necessary. Generally speaking, the Fed is reactive rather than proactive and other than the meeting two years ago, they generally don’t make such big announcements “on a schedule”. Besides, the stock market is not low enough and complacency reigns right now. Why, if the sheep are complacent (about stocks) would he want to scare the public by telling them that even though the stock market is over 13,000, things are really bad. People would would wonder and ask “so bad that more fuel needs to placed on this bonfire?”. This on it’s own could start a panic, in which case the Fed would have WHAT response? None you say? This, is the problem!
The problem is that on one hand investors are being told that stocks are cheap and a good value and things are not so bad or problems insurmountable. On the other hand the economy is in the tank, unemployment is a rampant and monstrous nearly 20% if you calculate the “old way” (truthful way) and housing is still sluggish and close to comatose. On another hand (that’s 3 hands) there is a derivatives implosion going on underneath the surface that we are not supposed to or allowed to see but we do know that collateral of all sorts is impaired to the point of near zero. While mentioning collateral, the world seems to be running short of this precious commodity or at least much that has not already been encumbered. The “problem” is that the Fed cannot (though it always does) speak out of both sides of its mouth, they cannot tell us that all is well and then do more QE.
No, we the sheeple must see a crisis with our own eyes and then beg the Fed to “save us” again…or at least that’s the thought process of those with their hands on the levers. They will need to let some bankrupt turd somewhere, somehow, surface for all to see. As you know, there is a rumor swirling that Margin Stanley is failing (or is it “being failed”). This would serve the Fed’s purpose to a tee! Float MS to the surface bloated and dead, then, and ONLY then (since we all know that the world will end if no QE) will the Fed “QE”. It will be their duty…their mandate! At least, this is the type of scenario I envision the next announcement of QE to be accompanied by.
I want to make one further comment about “current times”. We have gotten SO FAR away from what would have been accepted as logical just 12 years ago. At the turn of the century, no one would have accepted the current c—– j—- where the Fed prints up Dollars to purchase 70% of Treasury issuance. We would not have accepted nearly 20% unemployment being reported as 8%. TARP, ZIRP, NIRP, QE or twist? $1+ trillion annual deficits? The public would never have gone for it. 46 million on food stamps? Getting groped in airports? Fighting 2 wars and poking a stick in several other areas hoping to escalate another? No, none of this would ever have been accepted and had you forecast ANY one of these, much less all of these, the tin foil dunce caps placed on your head would have made even the most hardcore survivalist green with envy! Looking back, I see how it was all done and can only shake my head. I would never ever have believed it and would not have bothered even with conversation had someone suggested that we would arrive where we are now. …And the sad thing? All of this is accepted, considered necessary and (say it’s not so), NORMAL?
Like I said at the beginning of this piece, we are going to hear that we need a LOT of “cooperation” between central banks and sovereign treasuries to get through these current hard times (not to mention the sheeples). I ask you these questions, didn’t “cooperation” get us into this mess in the first place? Did they need to “cooperate” more? The whoppers weren’t big enough? Maybe they should be bigger?