Irrational Exuberance

news.goldseek.com / By: CAPTAINHOOK / Monday, 24 April 2017

Remember the time you might have first heard the term ‘irrational exuberance’? I will never forget it. It was in December of 1996. Alan Greenspan tried to warn people the stock market was getting ‘carried away’ at the time, which is rich considering the bubbles he was responsible for afterwards. Fast forward to today, and we have the same situationessentially, given the larger degree credit cycle is much closer to an end than a beginning,if not done. Thing is, you can never trust these people, central bankers, because they are in the business of expectations management in order to keep their bubbles inflated, where they will say anything to get the desired results, including telling boldfaced lies.

And last week’s episode is a classic example of this, because given the fragility of theeconomy and markets these days, there is no way the Fed will actually shrink it’s balance sheet in coming days – no way. Some think the Fed wants to get rid of Trump, which is why they are they are raising administered rates, where Trump would own the chaos. Thing is, raising administered rates can be countered by other means, part of the game that’s played at times like these. No, if they really wanted to crash the economy and markets to this end, then they would in fact shrink their balance sheet, but they are not – at least not to any appreciable degree – see here.

Of course it could be argued the economy and markets are so fragile the Fed might be able to get away with jawboning in this regard too, and such an assessment could be correct. Because what usually happens when the Fed starts talking like this is the speculators / hedgers short stocks (again), which provides new fuel for the perpetual short squeeze. And that’s likely the ploy here on the part of the Fed again. They get to talk tough here while raising administered rates, which is expected in the first half of a

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