No Markets, Just Manipulations
Chris Powell of GATA once famously quipped, "there are no markets, just manipulations". Never has that been more clearly displayed for all to see than on Monday, June 29, 2015.
Please understand, I'm not simply complaining about the ever-present metals manipulation. That's just an everyday fact of life and you saw it again today shortly after the Comex open. No, no, no. What I'm talking about here is manipulation on a GRAND SCALE, the type of thing very few people are able to comprehend or even willing to recognize. The central banks of "the west" are now attempting to completely control the outcome of each and every global market through their "interventions" in the currency and fixed income arenas. By doing so, they are unnaturally setting "prices" and "values" and the consequences of these uneconomic distortions will be catastrophic in the end. For now, though, it's just business as usual. CNBS can report that "the latest Greek crisis has been contained" and LIESman et al can continue pumping the story of global recovery and bliss.
So how did this all play out? Once again quoting Inigo Montoya, "let me explain...no, there is too much. Let me sum up":
In response the rapidly-unraveling Greek situation, the euro opened dramatically lower versus other currencies late yesterday when trading resumed. This plunging euro sent the POSX higher but it also sent the yen higher relative to the dollar as funds that were exiting the euro were desperately flowing to almost any other currency. There was also a small unwind of the risk-based "yen carry trade" that caused yen buying. Because of this rally in the yen, gold was poised to open higher, which it did by $10, and it eventually extended those gains to $15 in the first few minutes of Globex trading.
The first central bank to act was the Bank of Japan. Unwilling to see an appreciation in the currency that they had worked so hard to debase over the past 36 months, Mr. Abe and Mr. Kuroda immediately unleashed the hounds and began to sell yen--buy dollars. You can see this on the USDJPY chart below where rising values mean a falling yen:
And why move to intervene so aggressively? A number of reasons. Obviously they'd like to perpetuate that carry trade however, as you can see below, they also managed to keep the JPYUSD within the range that we've been following, thereby avoiding the picture of a rising yen that had seen a blowout low near 80 and was now recovering and moving higher. Without the BoJ intervention, would the JPYUSD be back above 82 this morning? Yep, very likely it would be.
The more egregious intervention came from the Swiss National Bank, however. Promptly at 2:00 am New York time and 8:00 am in Bern, the SNB began to "intervene in the franc" as the euro was tumbling very quickly against it. THIS IS NOT SPECULATION OR CONSPIRACY THEORY. Instead, this action was later confirmed by Thomas Jordan himself, the head of the SNB. http://www.reuters.com/article/2015/06/29/swiss-snb-idUSZ8N0WY00L20150629 & http://www.ft.com/intl/fastft/351501/swiss-national-bank-intervenes-currency-market
- JORDAN: SNB INTERVENED IN FRANC OVER NIGHT
- JORDAN: SITUATION OVER WEEKEND MADE INTERVENTION NECESSARY
"As the SNB president admitted: “There was an increased demand for francs” over night, Thomas Jordan says at conference in Bern. “The SNB intervened in the market to stabilize it.” In other words, without the SNB, the situation would have been truly dire."
PLEASE CONSIDER THE SIGNIFICANCE OF WHAT IS HAPPENING HERE! Global central banks no longer allow the "free market" to set price and flow funds. Instead, in a desperate attempt to maintain the veneer of normalcy, these central planning goons create an alternate reality...buying and selling their own currencies (their citizen's currencies) in their efforts to effect outcomes.
This is outrageous and it will NO DOUBT one day cause a massive destruction and reset as Economic Mother Nature re-asserts herself and a normal/natural economic equilibrium washes back ashore in a tsunami of revaluation.
In the end, I couldn't care less what the paper price of gold is today. As you can see on the chart below, price isn't influenced by anything fundamental or tangible. It's all nonsense and shenanigans, instead. Does it matter that Europeans are flocking to mints to buy physical gold? No. Does it matter that one of the world's largest fiat currencies may be on death's door? No. Does it matter that more, global QE is assured as central banks desperately distort and contort to maintain their power? No. All that matters is the flagellations of the central banks and bullion banks and the ripples they send out to every other "market".
So, let the global goon squad do their thing. Ignore them and ignore the paper, fiat-conversion price. Just keep stacking and preparing for the disaster that lies ahead. Have you seen the pictures from Greece? If you don't think that scenario is coming to a neighborhood near you...well, then, you've just been willfully duped by the central bankers and you deserve what coming to you. All the rest of us will remain situationally aware, preparing accordingly for The 100% Inevitable End of The Great Keynesian Experiment.