I Am a Little Bored Today; Maybe a Friday Market Riot Would Get the Juices Flowing?

And this second video speaks to an audit of the Fed. Bring it on!

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11 thoughts on “I Am a Little Bored Today; Maybe a Friday Market Riot Would Get the Juices Flowing?

  1. Over time, hopefully shorter, the public shall have to face what the Fed & central banks, generally, have been doing over the past century: pretending to create real money.
    To print Monopoly money, pour it into the banking industry, & tell the banks to lend all but a tiny fraction of it (“fictional reserve” banking), gets us here, into the late stages of our fantasy Ponzi scheme.
    Whether we face this via an official audit, web-based awareness, whatever, it may take much more denial, then some intense pain, to get us there.
    Historical pattern:
    Politicians mismanage economies, then look for scapegoats when the s__ hits the fan.
    “Regulation,” “reform” of trading, = even more manipulation by politicians, this is the last thing we need.
    It’s probably true that sound TF practice is timeless, even compensating for currency dilution of the world’s (not just one economy’s) reserve money.
    But, how well will that hold up, if markets aren’t allowed to function?
    Uncharted territory, no pun intended?
    At any rate, thanks to Mike Covel, I got through yesterday flat on my novice Turtle futures mix, made a couple percent long on equities (metals).
    Could be dumb luck…
    Appreciate reports from experienced guys.

  2. Just to add:
    Did we hear the guest say, “Sovereign default is not an option?”
    Or something to that effect?
    I remember jumping out of a plane (we had volunteered…), trusting the gear & my training – if I’d left the parachute back in the aircraft, would it have helped me to say, “The law of gravity is not acceptable?”
    And, did he add, “I won’t accept volatility?”
    And “reforming” markets will achieve all this?
    Via rules by politicians?
    As opposed to rules, on privately-regulated exchanges, established by professionals with experience in the business?
    I hope the public will get to understand this crucial difference.

  3. If U.S. government has to immediately implement austerity measures like being done in Greece…very fast like there…there will be riots here.

  4. If an audit of the Fed would bring about more public exchanges for new types of contracts and make it illegal for financial institutions to create contracts that are marked to market on a period of 3 months (instead of every day’s close) then I’m all for auditing the Fed.

    However, it is unlikely Fed audit will make any progress on those fronts. Audit of the Fed would more likely lead to sparing liquidity when it is needed in the future. I say Fed should print or sanitize money as needed and people should take responsibility for their own risks in markets that remain open and active come hell or high water. In other words I would prefer liquid markets with narrow spreads and wild swings to stagnant prices and no liquidity because of discomfort in “strong” money.

    Auditing the Fed seems something of a Libertarian hobby horse that comes up over and over on this blog. The only thing that really matters is that the government has the money in relative terms to buy the energy and the hardware to make things stick in a crunch. The actual numerical value of the wealth is irrelevant as long as it is sufficient for the task.

  5. Blue Horseshoe, ‘freedom of information’ is basic to U.S. Federal and State law. Draw whatever political inferences you want, but the government by and large has to turn over data such as this. If there is no big deal, then let us know what exactly went down in the fall of 08.

  6. “I say Fed should print or sanitize money as needed.”

    Wow, trusting type, eh?

    And of course…’as needed’…is decided by who for what reason…move along people nothing to see here…

  7. To me it’s all a grand zero sum game with the Fed as facilitator/book-keeper after the fact to whatever malfeasance. Somebody has to pay for losses due to the malfeasance. Money was taken out and spent from lines of credit against inflated homes and taken out in trading profits from the financial wake. For one, I am not returning the money I made in trades.

    Ultimately I trust the markets to keep the Fed in check relative to what went out and what is put back in. No doubt tax payers and some asset holders are going to pay who are not as well informed about their risks as they ought to be. Not sure what the practical alternative is though…

    What comes to mind is this bit of dialog from a movie you might know:

    Bud:”…I swear to you, he’s lying!”…
    Bud:”You know he’s got a history of this kind of bullshit…”
    Lynch:”Somebody’s gonna pay. It ain’t gonna to be me.”
    Wall Street 1987 @ 0:07:00 minutes

  8. Agreed…U.S. will see riots – only difference is we have lots of people with guns and a willingness to use them. IMHO, will be worse in the U.S.

  9. Amazing to hear people suggest that auditing the Fed (which by definition means looking at events in the past) is a bad thing! Having a group of people making secret bets on the economy is crazy to me (no transparency, no accountability). I just don’t understand this line of thinking.

    We must see this information to maintain our freedoms IMO. An investor wouldn’t think of investing in a company if they didn’t have to file their statements with the SEC. Why should it be ok for the Fed who has MAJOR influence on the economy not to have their books audited. I just don’t get it.

    Blue Horseshoe – HELP me understand??

  10. Jim B.: Yup. I’m right with you on the freedoms so maybe another analogy would help. I eat my share of steak but it doesn’t mean I want to know the details at the slaughterhouse! For me, knowing the basic operating principles at the slaughterhouse and that there are some internal controls on the ethics of the process is enough information.

    To be sure, the Fed has some grizzly internals where money is piped through high pressure hoses with it spilling all over the place in a sort of riot control activity. On the bright side, the Fed also sanitizes earlier expenditures by reducing the money supply when times are good. Looking too closely I think would be like inviting proposals on throwing explosives into the waterworks instead of just upping the pressure from time to time when a stubborn turd is clogging the system.

    One point I do agree with is that direct public ownership of formerly private banks is a new kind of intervention – but it was not a gift. Money was exchanged for shares and stricter operating controls, My preference would be that failed companies would be liquidated, unwound, and “paved over” but my understanding is that Congress was unwilling to broaden Fed powers that much.

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