Source: Wikimedia

Dear Diary,

New York is filling up with holiday shoppers and tourists. On Saturday, we went to the Broadway show Jersey Boys.

It was not an especially complex or subtle storyline. But the music, of Frankie Valli and The Four Seasons, was lively and agreeable. It took us back to the early 1960s.

Those were the days!

Back then people had jobs… prices were fairly stable… and the GDP was growing at twice or three times today's rates (and so were personal incomes).

How was it possible?

Back then, under chairman William McChesney Martin Jr., the Fed ran much tighter monetary policy. So America's savers could earn a decent return on their money. And the Fed wouldn't have even dreamed… let alone dared… to target higher stock market prices.

What about quantitative easing?

It was probably illegal. And certainly would have been considered immoral or insane.

But there are fads in music… and in central banking, too.

The music industry has given us “twerking.” (Google it.) And in central banking, we have multitrillion-dollar asset price manipulation programs. Both are obscene. But both are popular. And almost nobody wants to see them stop.

But in the end Mr. Market… nature… and the gods… will prevail.

Thy will be done. It always is.

Defying the Gods

As we closed out last week, US stock market benchmarks were climbing to new highs. And gold was taking a $17-an-ounce hit.

But what happens next is not up to us. It depends on the gods, who represent the forces of “what shall be,” not “what we want things to be.”

All we know is the Fed cannot control the outcome. Nor can individual investors. Nor Paul Krugman. Nor the president of the US. Not even Warren Buffett or the NFL can dictate the terms of this story.

You can tinker with nature… you can bend and twist the markets… you can delay and outrage the gods… but you can never control them.