A Central Banker Says The Quiet Part Out Loud—Financial Speculators Own Us

Someone quick tell the BOJ’s Deputy Governor, Uchida Shinichi, to remain more inscrutably oriental. For crying out loud, the man just said the quiet part out loud. To wit, the mad money-printers at the central banks of the world do indeed march to the orders of the speculators and gamblers in the financial casinos they have fostered.

“Therefore, the Bank will not raise its policy interest rate when financial and capital markets are unstable,”

There you have it. The dopey central bankers of the world have become abject captives of the speculators and 1-percenters who dominate what used to be called the stock, bond, real estate and money markets.

No more. The financial markets are more like a “weird” gambling casino where the croupier deals the cards face up. Central bankers are pleased to call this “forward guidance” but it actually amounts to a financial dog whistle to adept front-runners as to when to buy, hold or fold.

But that is an unspeakably insidious thing, and not just because it amounts to government-conferred windfall gains to wealthy speculators. The real evil is that central banks have relentlessly and progressively extinguished the price discovery function of money and capital markets entirely.

Accordingly, corporate earnings, macroeconomic conditions, growth outlooks or even the uncertainties of politics and war count for but little. What moves the markets is day-trading the well-telegraphed maneuvers and hand-signals of the central banks and adroitly riding the bubbles which their massive floods of liquidity and fiat credit inject into the electronic trading pits.

This central bank orchestrated transformation of financial markets into crooked gambling joints is truly iniquitous because it channels windfall wealth to the tippy-top of the economic ladder—the very last thing the state should be doing.

Yet given that the top 10% of households own 90% of the financial assets, that’s the predictable and inexorable result of an irredeemably flawed central banking model that foolishly attempts to levitate jobs, growth, incomes and societal wealth by pegging interest rates and falsifying financial asset prices.