Market Interventionists’ $29 Trillion Roach Motel

Published on Jun 19, 2014

The recent Financial Times article about central bank “market” investments of $29 trillion has been widely misinterpreted in two major ways, and a key question has been left unaddressed.

First, the huge “market” intervention does NOT mean “stock market.” Rather, it refers to nearly all markets generally–including gold.

Second, the interventionists are not limited to central bankers. Instead, the $29 trillion investment figure comes from not only central bankers, but also public pension fund managers and sovereign wealth fund managers.

Missing from the discussion so far is what happens when people start trying to get out of their investments. Alas, the situation now is even worse than in 2007-08. Not only have fundamentals deteriorated beyond where they were back then, but the scope of the inevitable collapse–when nearly all overheated markets regress to the mean–will be far broader.

It would appear that the interventionists have surrounded themselves in a giant circle of lit dynamite in hopes that the fuses all reach their cores simultaneously and in rapturous harmony, and that the resulting explosions will cancel each other out.

Unfortunately, since they’re using public monies–in unprecedented quantities, mind you–we can’t afford the luxury of sarcasm in wishing them the best of luck.

It should go without saying that the media will be there to assure us that “no one saw it coming” when the outcome of this insane experiment is anything less than 100% success.