The global financial and trading platforms have become overloaded by the competing demands and overwhelmed with fierce competition among too many players at the top of the Pyramid (as in scheme). The top 1% are now playing a very serious game, the skirmishes of which have broken out into the open as never before.
The trading programs alone are overwhelming the current institutional arrangements designed to handle up to a certain volume. The sheer capacity to properly process and integrate the countless transactions necessary to prevent a system-wide collapse is becoming weakened and compromised by the day. This not only includes equities, but currency and derivatives as well.
The expansion of those exchanges that speculate on food prices, demand for food commodities and weather impacts on agriculture has become particularly worrisome. As worldwide weather patterns become more volatile, and climate change more unpredictable, these markets now possess the capability to starve whole regions of the world, as well as bankrupt entire nations.
How did we arrive at this critical juncture?
Global Financial Architecture and Economic Systems on Verge of Collapse
Because there are too many parties and counter-parties often operating at cross purposes with each other. The gargantuan derivatives market is a perfect example of how this monster has gotten out of control. There will come a time in the not too distant future when the growing number investors, brokers, pension funds, central banks, etc., who want a piece of the pie, will find out that there is no more pie.
Funny money monopoly always does end the same way. When you fold up the board game, you know that it was just a game. Except that in the current marketplace, it is the little guy who’s been gamed.
The players at the very top have set up the game so that they can never lose. Just like Las Vegas, the house never loses or else the casino could never stay in business. Welcome to the NYSE, as well as every other gambling casino — or rather stock exchange. They’re all rigged in ways that the small investor cannot even imagine, or begin to comprehend.
Which brings us back to our theme — SYSTEM OVERLOAD!
The room has too many gamblers in it who all want to win. Those at the top of the food chain have never lost before, and don’t plan on losing in the future. Therefore, the smoke and mirrors required to maintain the illusion of order and propriety are becoming as time-consuming and tedious as they are costly and labor intensive.
Gold Backwardation is the perfect example of the current zaniness of the bullion market
Do you have any idea how difficult it is for the financial controllers at the pinnacle of the GE&FCM (Global Economic and Financial Control Matrix) to maintain the appearance of normalcy in the precious metals market, especially gold?!
“Gold price” versus the “price of gold” illustrates the Sisyphean task that these ‘folks’ are confronted with every single day. Their determination to control the gold price — at all costs to institutional credibility and market integrity — have preoccupied them in ways that are quite mind-boggling. Of course, it usually takes a rather seasoned observer to understand the degree of market manipulation required to perpetuate this whole mirage. In the case of gold, however, even the uninitiated can now see the many instances of engineering the gold market. The frequent gold takedowns alone have become dizzying, especially when all the market forces and trading dynamics would strongly suggest price increases.
The fact that the average Indian and Chinese investor is now buying gold as both a store of wealth and hedge against a dollar collapse is quite telling. As other countries engage in the same practice, in spite of draconian capital controls being imposed, the controllers are literally “pushing the boulder up the mountainside”. The recent repatriation (attempted, that is) of gold by several nations from the USA and UK has also added more weight to this massive boulder. So has the spate of gold mine strikes and the prohibitive costs associated with mining hard-to-access gold-bearing veins.
The reason that gold price and demand is so micro-managed is because it has always functioned as the barometer of where real investment money is going. More importantly, it reflects the nervousness of the markets. For instance, if gold were to shoot up in price, confidence in the general economy to recover has waned. Fiat currency then takes a HUGE hit, as a precursor to an escalation of the already raging currency wars.
Why Gold Always Goes Up During Quantitative Easing
Bear in mind, we’re only talking about gold — one single commodity — which mandates an awesome amount of attention and control.
When you pile on all the other precious metals like silver, platinum, palladium, etc. and then consider the precious gem markets such as diamonds, you begin to appreciate the fix they’re in. And, therefore, the fix we’re in!
Remember, there are vast movements being effectuated in all the other markets as well, each of which must be finely managed and coordinated since the’re all inextricably interconnected.
Those include the equity, bond, currency, commodity, real estate, and derivative markets. For instance when real estate crashes, as it did in 2007/2008, collateralized loans are obviously affected. The asset deflation wreaks havoc on the debt which it supports. After all, how is an underwater mortgage going to continue to function as collateral?
Which brings us to the conclusion of this commentary on “the current status of the marketplace”.
The trading markets will never again be the same. Until there is real systemic change, VOLATILITY will be the name of the game. Too many people now know too much about the inherent flaws and profound defects pervasive throughout the global trading platforms and financial architecture. Therefore, the unpredictability, as well as the periodic “crash and burn”, has become the new normal.
How can the small investor participate in this kind of turbulent investment climate?
Very cautiously … … … and very responsively.
We have entered the times when the BIG boys are now beating each other up for a piece of a vanishing pie!
State of the Nation
November 7, 2013
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