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“More Stress Is Needed”

The User's Profile Chris Martenson June 20, 2012
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After Alice fell down the rabbit hole, nothing made sense anymore. A new logic reigned, and she had to adapt to it as readily as she could. Talking cats that disappeared except for their grin, caterpillars perched on magic mushrooms, and other oddities had to be encountered and dealt with.

Similarly, we find ourselves suddenly confronted with a fantastical menagerie. Such as the formerly inconsequential Greek interparty political wrestling matches becoming of critical importance to the fate of the entire world banking system, stock markets mainly discounting the likelihood and size of the next round of magic money-printing, a world that has decided Spain’s 6% deficit matters a lot while the US’s 8% deficit doesn’t matter at all, untrustworthy institutions that just abscond with client money without charge, and stock markets that are now mostly in the hands of robot machines trading in sub-millisecond cycles.

The signs of distress are obvious. The old forms of logic no longer work and the new logic cannot be traded reliably, as it owes its direction to pulses of fresh money and gyrating sentiment. All asset classes trade in lockstep, with nowhere to run and nowhere to hide. It’s either risk on or risk off, and knowing which might prevail at any given moment is now a 24/7 occupation, and a risky one at that.

The entire stock market is now simply living off of expectations of the future quantitative easing (QE) efforts, with another decision or announcement expected tomorrow at 2:15 EST.

This is the world we live in now, and hardly anybody even questions it anymore:

Hedge Funds Boost Bullish Bets As Stimulus Pressure Rises

Jun 18, 2012

Hedge funds raised their bullish commodity bets as mounting speculation that central banks will announce more economic stimulus halted a slide in prices and drove gold to its longest rally since August.

Gold holdings rose to a six-week high, while wagers on a rally in silver prices jumped to the highest since the start of May.

More than $1.5 trillion was added to the value of global equity markets in the past two weeks on speculation the Federal Reserve will join central banks in bolstering growth at its policy meeting this week.

Commodities rose more than 80 percent from December 2008 to June 2011 as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing and held borrowing costs at a record low.

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Top Comment

Collapse already! It’s like watching paint dry!
Anonymous Author by rector
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