Banking On Insanity

by CaptainHOOK / Gold Seek

This piece could have been entitled ‘betting on insanity’ as easily as ‘banking’, because the theme centers on how gambling is not just distraction for the idiots anymore, it has gone systemic in our society today. However, considering who is primarily responsible for this mess, it seems appropriate. Because if there’s any one group that should be blamed for what is about to happen to the world, the wholesale financial collapse that is on our doorstep, it’s the bankers – those creatures from Jekyll Island. At its inception, the Fed was activated on the premise it could smooth out the business cycle, attempting to mitigate the boom and bust cycle that characterized economies previously. Fast forward to today, and unfortunately they have been allowed to perpetuate this to the point of removing the business cycle entirely in order to maintain this illusion, which is an unnatural state that cannot be maintained, one that will result in lethal reverberation when man’s natural state (think animal instincts) reasserts itself in our economies.

If you’re thinking this theme is similar to that discussed in ‘Avoid the Pain’ you are correct, because what we are essentially talking about is the argument against interventionist economics, central planning, etc, in favor of proper pricing market economies. Of course, human beings, being what we are, will attempt to avoid pain at almost any cost, searching out avoidance and distraction to the point of mass mania in stressed circumstances. Over time, fascists and other exploiters recognize this tendency and game the system to the point of collapse, which is where we are right now. Because with this gaming and rigging of everything in the system, again, having our banker buddies at center, the debasement of our society and economies via free money becomes insanity in its truest form, due to the degree of violence that will be required to return to any semblance of equilibrium in man’s larger economy. You see we need this equilibrium so that we don’t blow each other up.

But the parasites remain empowered with the mob now weak and fully corrupted, so no easy solution is likely, bringing us ever closer to the potential for conventional war. You see, the thing is, our banker buddies (and their oligarchy friends), and the useless and redundant bureaucracy’s with which they collaborate, that are concerned about nothing other thanenriching themselves, can only feed on a dying carcass for so long before the rotting flesh becomes toxic, which is without a doubt the case across all things Western now, or as some would brand it Anglo-Americana. But again, they keep trying by turning the screws in technology (HFT’s), which in this case means he who has the most powerful computers (and smartest programmers) wins the game, which has had the effect of turning Western financial markets into nothing more than video games that exploit people’s fears, which is of course the exact thing that allows gambling houses to prosper.

Hence the title of this piece, banking on insanity, because things just keep getting crazier by the day in the financial markets. Perhaps the best example of this at present is the crude oil market, where like what happened to overly confident and complacent precious metals speculators over the past few years, many perma-bulls are being culled right now, never to return to the game. Again, like paper market precious metals speculators to this day, which is why they don’t recover, bullish crude oil speculators think they have Mother Nature on their side, where you will hear them talking about supply and demand like such concerns actually matter, failing to realize that under the right circumstances any market can be toppled over by the machines today, especially if the market is pushed that way (the algos are programmed to hunt for news and react faster than humans) with well timed news events. 

So, it’s important to understand the weakness in crude oil has primarily been a result of someidiot hedge fund speculator(s) as opposed to conspiracy theories involving the US, Russia, China, and Saudi Arabia, although it would be naive to think the political economy is not a factor. And sure enough, once it was announced this clown was on his way out, crude started to rally right away, keeping its gains on the day. Now, the only problem for crude is all the other crazed speculators, price management, and global economic drag. Of course what’s good for the goose (precious metals) is good for the gander (oil), so don’t expect crude to go down due to deflation concerns if speculators get bearish, and start betting that way. COT distributions show that while more speculator related liquidation is to be expected, unlike stubborn precious metals speculators, this condition could be corrected much faster. When that happens (think months best case), crude should be in for quite a bounce because guess what – fundamentals actually do matter in the real world – not that our banker buddies have any such concerns.

Thus, the longer bankers are allowed to fund increasingly bankrupt finance, the worse things will get. Because one must realize, hedge funds putting on these trades (speculations, hedges, etc) are working with other peoples money, so they have a different ‘standard of care’ than if they were speculating with their own money. Maybe this explains why losing managers don’t bother to check what their competition is doing (put / call ratios), and they continue to get away with this stupidity (buying puts and shorting stocks along with the crowd as they are squeezed ever higher). But one needs to wonder how much longer (Dow 23,000?) they will be able to get away with this lunacy – when do investors pull the plug on these idiots? Pension funds are at the forefront here, however this could turn contagious, which would be bad for stocks, high yield bonds, and anything else these people have been buying. Right now, funds involved in high yield credit, especially in the US oil patch, are getting obliterated, which will undoubtedly cause at least a few funds to fold, if not spark afull-blown credit contagion like 2008.

Read more at GoldSeek.com:

http://news.goldseek.com/CaptainHook/1419866160.php