Thursday, April 21, 2016

Manipulation Suspicion

Johnnie Aysgarth: Well, if the worst comes to the worst and there's no other way out, I'll have to...
Lina McLaidlaw Aysgarth: What?
Johnnie Aysgarth: Borrow some more.
--Suspicion

A trader increasingly suspects central bank-led manipulation in commodity markets. There is no doubt in my mind that central banks, including the Fed, are buying financial assets around the world. They need prices higher to instill confidence, encourage 'wealth effect' spending, and prop up asset prices so that large scale deleveraging does not deliver a margin call to the world.

The hubris of central planners leads them to believe that their manipulation will be successful. Natural market forces promise to put their beliefs to the ultimate test.

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