BIG, FAT TOLD-YA-SO: CENTRAL BANKS TRADING & MANIPULATING ALL MARKETS

Ann Barnhardt

The S&P, the Dow, US Treasury Bonds, CURRENCIES (WHAT THE $%^&!), Petroleum, Metals, Agricultural Products, everything.  The Chicago Mercantile Exchange and CFTC have openly confirmed that CENTRAL BANKS are in the markets by posting the REDUCED FEE STRUCTURE for CENTRAL BANKS that trade the futures and options markets.  That link goes to the CFTC.  The Commodity. Futures. Trading. Commission.  As in the Federal Government of the Iniquitous Gutter Kleptarchy, your tax dollars at work, ‘Merica.  The CME has a special incentive program for Central Banks to trade.  Isn’t that nice of Terry Duffy and the boys to give the Central Banks a break on fees?  Aw.

Here is the write up at ZeroHedge, sourced from, yet again, Nanex.

There is no acid-trip rabbit hole deep enough to match the depths of insanity that have now been plumbed.

Are we fuzzy on what a “Central Bank” is?  Well, let’s go the definition just so everyone is crystal, crystal clear on this:

Central Bank: an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currency, which usually serves as the nation’s legal tender.

Um, yeah.

Sooooo do you think that it is a tiny bit problematic for entities that PRINT MONEY to trade equity, currency and commodity markets?

Do you think it is problematic that an entity that can print theoretically infinite amounts of money IN ORDER TO MEET ITS MARGIN CALLS can trade massively leveraged markets?

Do you think it is problematic that entities that can stand theoretically infinite losses, who can print their way out of ANY position with effectively zero need to ever close out a position, and thus utterly destroy any connection whatsoever of the markets to REALITY, do you think that might just present a tiny bit of a market integrity issue?  Just a smidge??

I want someone to explain to me how honest cash-derivative basis convergence can possibly, possibly happen if one side of the market has an infinite supply of funds, and thus for whom the entire notion of “losses” becomes a complete irrelevancy.  Please.  I’m all ears.

I want to know how arbitrage can occur in that environment.

And perhaps THE ENTIRE POINT:

I WANT TO KNOW HOW ANY DERIVATIVE MARKET CAN POSSIBLY REMAIN SUBJECT TO ITS UNDERLYING CASH PRODUCT/COMMODITY IF THERE IS NO WAY TO FORCE PRICE CONVERGENCE BECAUSE ONE SIDE HAS AN INFINITE SUPPLY OF MONEY.

I WANT TO KNOW HOW THE CASH MARKETS ARE NOT THEN PERVERSELY DRIVEN AND THEIR PRICES “SET” BY THEIR DERIVATIVE MARKETS,  EVEN UNTO COMPLETE IRRATIONALITY AND UTTER DELINKAGE FROM REALITY, WHEN ENTITIES WHO CAN PRINT THEIR OWN MONEY ARE TRADING DERIVATIVES.

Food.  Energy.  Currencies.  Precious metals.  Interest rates.  Equities (stocks).

Now we know why these flash crashes happen.  Now we know how it is that super-massive orders and trades have wrought havoc on the markets – running stops and clearing everyone and everything on the other side out in quantities that surpassed the sizes of any possible private market participant.  Central banks.  You people are trying to trade against someone with an infinite supply of money.

As I have been screeching for years, it’s all fake.  See Part 7 of my Economics Presentation on YouTube, beginning at the 8:30 mark.  There are no real people left in the markets.  It’s all a facade, and behind there is nothing but Central Banks and computer algorithms, propping up whatever prices the oligarchs want propped-up (like the EQUITIES MARKETS), and suppressing what they want suppressed (like the METALS). Oh, and there are yet a dwindling handful of imbecilic stooges and the used-car salesmen brokers who lack the integrity to tell their clients the truth, both hoping to milk and pimp just a few more bucks out of the orgiastic abomination.

And it is hinted at the end of the ZeroHedge piece, but I will state it explicitly just to get it out there:  The United States Federal Reserve Bank is trading the markets through a super-massive hedge fund/ high frequency churn house called Citadel.  Now we know why Citadel is levered-up to the jaw-dropping extent that it is:  Why fear leverage when your number one client meets its margin calls by PRINTING US DOLLARS?

When I folded my firm in November of ARSH 2011, it certainly smacked of defeat.  I admit that.  Just because I did it with moral certainty doesn’t mean that there wasn’t a decided air of “the bad guys won and I lost” about it, and doesn’t mean that it wasn’t a tough pill to swallow at the time.  But now, good grief, I am so overjoyed to have my engagement with these markets and that industry in the rear-view mirror and totally out of sight I can hardly describe it.  All of us who have been calumniated as “tinfoil behatted loons” with regards to the corruption, manipulation and non-viability of the markets now stand confirmed and vindicated.  How is anything other than a total financial market strike justifiable now??

When I concluded my “shutting down letter” with the words of David, it was with the grinding teeth and clenched fists of a blind faith.  Now I restate it with nothing but confirmed joy:

“This is the Lord’s doing; and it is wonderful in our eyes.”  

Yes, it was, and yes, it is.

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