You've probably seen the Jack Link's Beef Jerky commercials where unsuspecting campers think it would be fun to mess with Sasquatch – an eight-foot tall, 400-lb. freak of nature.
I like these commercials. What kind of idiot thinks they can get away with that?
When you mess with Mother Nature, she knocks you out with a fist to the face or a kick in the ribs.
And yet it's a lesson the financial markets are setting themselves up for today – you can't manipulate the free markets without very serious ramifications.
The latest installment in this much-dragged-out drama is the Chinese. They've created a $486 billion fund to buy their own stocks to keep them from crashing. And that's on top of telling major investors and pension funds they can't sell their stocks for six months. Oh, and threatening to jail short sellers.
How can they possibly think they can create a 159% stock bubble in one year without Mother Nature showing up to remind them who's boss?
It's like central banks think they can keep the economy and a bubble going on short-term life support forever.
This is not an economy. This has become a mutated freak of nature. I might actually start calling it “Sasquatch.” Or Frankenstein.
Of course, many still think governments and central banks can keep this mutant freak of an economy in check.
And that means when the free markets finally take control and start bursting these bubbles and deleveraging our debt, they'll do it through a means governments can't control, and with an even greater vengeance.
Outright Perversion!
Central banks have been manipulating and outright perverting the free markets since 2008 (and to a lesser degree for decades prior).
When the financial crisis emerged, they began printing money on an unprecedented and massive scale.
When Wall Street started taking major losses on failed loans, we suspended the rule of “mark to market” for loans. That to me is worse than QE – no one has to take losses for their bad loans! What type of take risks and learn, free market system is that?
