DEATH BY DEFLATION…”One by one, currencies will serially crash”
Andrew Hoffman
SilverSeek.com
January 6, 2015
This weekend, a reader sent me a Forbes article with one of the most clueless, disingenuous themes imaginable; i.e., “there is zero evidence (repealing Glass-Steagall in 1999) unleashed the financial crisis.” I have always been fascinated by Forbes’ flip-flopping around reality and delusion, especially as Steve Forbes is a notable gold bull; in fact, one of the most vocal advocates of a new gold standard. Then again, for a variety of reasons cumulatively depicting the flaws of human nature, even many of the financial world’s brightest minds refuse to acknowledge the most important factor driving them; i.e, the manipulation of markets by the “weapons of mass destruction” developed post-1999 by banks armed with modern technology, unlimited Federal subsidies, not a shred of regulation or oversight, and the often explicit guarantee that they are indeed “too big to fail.”
Why do I bring this up, as I write on what could turn out to be an utterly terrifying Monday morning? Because watching the, as Zero Hedge put it, “bidless” Euro open a cent and a half lower last night, amidst plunging oil prices and exploding fears of a Euro-killing “GrExit,” it truly horrified me to witness what derivatives have created. As first hinted at by the May 2010 “flash crash” – when the Dow plunged 700 points in minutes due to an overload of high frequency offers that created a vacuum of illiquidity costing hundreds of millions of instantaneous losses, derivatives have not only destroyed markets permanently, but driven retail and institutional participation to record low levels. The October 15th flash crash in Treasury yields – when the 10-year yield plunged from 2.21% to 1.87%, also in minutes, was a second blaring warning of what’s to come. And trust us, when “what’s to come” inevitably arrives – perhaps this year – if you haven’t already protected yourself, it will be too late to save yourself.
Throw in the fact that the handful of banks that operate the majority of such algorithms are, for all intents and purposes, insolvent – funded solely by the Fed, ECB, and other Central banks’ printing presses – and you can see just how dangerous “markets” have become. Not to mention, when said Central banks’ own stock and bond buying have driven valuations to record levels amidst the worst fundamentals of our lifetime, whilst the few institutions still remaining are robotically programmed to buy into such lunacy, driven by to archaic, suicidal “rules” built into the financial world’s “DNA.”
Throw in the sheer lunacy of the government taking over key businesses; such as housing, given that Fannie and Freddie now purchase essentially all new mortgages, and we’re talking about not only a “radioactive” financial industry, but one on the verge of nuclear implosion. And this, the sector that produces more “profits” than any other in America! In other words, not a shred of humanity, common sense, or incentive remains in the financial world (other than for the government-backed “1%” to pillage the “99%”) – yielding “markets” more prone than ever to being instantaneously vaporized. Which is exactly what’s barreling down the tracks like a runaway locomotive; likely, MUCH sooner than most can imagine.
The Rest…HERE
