While money managers, talking heads and other assorted various market pundits are wildly cheering the actions of the Europeans who have agreed to a plan for papering over the Greek bond, Italian bond, Spanish bond, Portugal bond, and heaven only knows what other country's bond problem, I cannot help but shake my head in wonder at such incredibly shortsighted "wisdom".
I think it safe to say that the level of the various equity markets have now become national security issues for most of the industrialized nations of the world; so much so that bear markets in stocks are no longer permitted by the monetary and/or governing authorities. The notion seems to be that an adjustment in prices by a free market cannot be permitted because of the fallout such an event would have on the overall financial system. Therefore, the end justifies the means - the end being preventing a credit lockup justifies governments using taxpayer money to bail out banks which made poor investment decisions and nations which apparently cannot balance their budgets.
While the Ra-Ra crowd cheers this sort of thing on extolling how wonderful it is for the economy, they are ignorant of the fact that the BEAST once let loose, cannot be controlled. Do these shortsighted fools not realize that the hedge fund community is not going to selectively bid up the prices of equities and completely ignore the basics of life such as food and energy? The same speculators that these governing authorities are attempting to placate are going to devour the hand that feeds them, or better yet, the food that our hands use to feed ourselves.
Just look at what is happening to the Continuous Commodity Index ( CCI ) as a result of this spiking of the punch bowl. The hedge funds are piling back into the commodity sector as they now have a green light for their risk trades and will begin leveraging up all over again. In the process they are pushing back up the grains and the energy sector. While recently both had come down in price, giving cash-strapped and hard-pressed citizens a bit of relief from the double whammy of stagnant wages and rising food and energy prices, that now appears to be going with the wind.
One can already see the impact at the grocery store of the rise in prices earlier this year as the cost increase finally worked its way through the distribution channel. Buy a box of cereal and spend more than $5.00. What in the hell is the average citizen supposed to do by the time these pestilential governing authorities finish with us? Spend $10.00 for a single box of cereal?
We have reached a point in Western society where this non-stop interference by the monetary and governing authorities is steadily destroying what is left of the middle class. Nice job you clowns. Keep the stock market elevated and the price of the huge bank share prices elevated but destroy the very foundations of the society itself.
I hope I live long enough to see the history books accurately portray where the ruin of the West originated - the Central Banks and the stupidly clueless political leaders who led us down this rabbit hole.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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