Friday , 19 July 2024

Market Madness: Stay Tuned, This Story Has Hardly Begun

This summer we are nearing a possible inflection point in terms of Fed actions. Thestock-trading-picks1-190x190 mere suggestion from the Fed that something is going to change is enough to supercharge markets, either up or down….Will markets go to 20,000 or to 5,000? That depends upon the Fed and how much they debauch the currency…….Stay tuned, this story has hardly begun.

So writes Monty Pelerin ( in edited excerpts from his original article entitled Market Madness.

[The following article is presented by Lorimer Wilson, editor of and and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Pelerin goes on to say in further edited excerpts:

It is hard to continue an economic policy based on smoke and mirrors but that is all the Fed has to work with. What they do and how well they do it will determine how high or low markets go. Nothing they do, however, has anything to do with healing the economy.

The Fed’s charter never included keeping markets levitating beyond where they should be. Now, at least de facto, it does. The Fed surrendered whatever independence it supposedly had.

  • It is now just another tool of the political class. Like all government agencies, it exists to benefit the political class.
  • Its ability to effect positive change in the economy is over.
  • Its role now is to keep financial markets levitating so as make some believe the economy is recovery.

The Fed is not [independent] and there is nothing that the Fed can do to alter that fact.

[The fact is that the Fed] can not stop liquidity infusions [because if they were to do so:

  • financial markets would collapse and
  • government checks would stop going out.

The Federal government has no means of financing its spending levels without resorting to its own captive counterfeiter.

Will markets go to 20,000 or to 5,000? That depends upon the Fed and how much they debauch the currency…

Stay tuned, this story has hardly begun.

[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]

* (© 2013 Monty Pelerin’s World. All rights reserved. )

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