The following article was first published by William Lee, PTG’s President, on The Mixed Market Artist on July 31, 2015.
The monster, Zirpenstein, has continued to grow. The headline that is the most significant and is the greatest fundamental (mentioned in “Technicals Inform the Fundamentals: QE4ever?”) is not mentioned by the financial pundits – WE ARE IN THE ERA OF THE CENTRAL BANK AS CENTRAL PLANNER! (read more in “Don’t Be So Pretendtious!”)
Japan has initiated QE. The ECB is continuing with QE on steroids! China has initiated its version of QE!
This is not ZIRP. It is G-ZIRP! Global Zero Interest Rate Policy!
The media, so anxious for a witty coining of another over-discussed event like Fiscal Cliffs, Taper Tantrums, Operation Twists, TARP’s, QE’s and the silly euphemism that emasculates the speaker when they utter it – The Grexit, is officially permitted by the Mixed Market Artist to use this new coining – G-ZIRP.
While The Mixed Market Artist is being so gracious to freely dole out catch phrases to the twitchy, bobble-headed media pundits, they can have another…It’s BARF!
BARF is what the Grexit should be called. A Grexit would be like vomiting Greece out of the European Union.
The tightest analogy that describes what happened this July is – the European Union held in its BARF! (The incapable Tsripas, tastefully depicted in an earlier Mixed Market Artist quick byte, actually makes me want to vomit!)
Take one thing away from this line of peculiar analysis, and that is that holding in your vomit often leads to the unavoidable – the eventual bigger YAK. The European Union is still hungover from the 2008 crisis, and the ECB is basically biting the dog that bit them by delivering more bailout money to the Greeks.
Now, getting back to the discussion on the greatest fundamental…G-ZIRP (THE ERA OF THE CENTRAL BANK AS CENTRAL PLANNER).
The G can be pronounced as it is in names like G-Money, G-Thang, G-Killer, etc.
Or, the name can be pronounced like guh-zurp. This requires a guttural pronunciation.
While you utter this new and improved financial news marketing term, you could gulp like you know we all will when the Zirpenstein causes calamity and treachery in the financial markets.
The Zirpenstein and the Puppet Master Look Ready for a Collision Course
We have to pretend that Janet Yellen and her close circle of a few “bankers/politicians” are of such valor and keen acumen that they are now going to skillfully navigate us out of the murkiest waters of global central bank overreach that we have ever seen.
After the Greenspan and early Bernanke years contributed to the last financial crisis, are we supposed to believe that without any fundamental changes being made to the financial system there will not be more of the same? (Again, read an earlier MMA post that discusses how the central bank system suffered little as the Lilliputians paid the price.)
The Illusion of Control
G-ZIRP is unprecedented! There is no model for it. Bernanke, Yellen, and their ilk talk so calmly about this scenario for a couple reasons. They have a false confidence in the pseudo-science that is their life’s study – economics, and they have none of their own money directly on the hook.
The Central Banks of the US and the European Union look more like the Politburo of the former Soviet Union than a group of bankers! Does not anyone see this?
Don’t be Fooled. Look to the Price of Commodities to Dictate Fed Policy if Janet and Her Posse Maintain the Last Modicum of Humbleness.
The Mixed Market Artist has brought much attention to indications of a weaker Chinese economy as crude oil prices plummeted this year. (See, Cycle of Weak Global Demand: Chinese Export Number Misses Big! and Crude Analysis of Crude: I Enter the Center of the Cycle!)
If you come across a serious article about what the Fed might do next – one that presents arcane bits of data to pretend that the Fed has a model for these times, you are probably reading what an over educated wannabe is wont to provide given he/she’s head is filled with drivel and lacking common sense and/or real experience.
Look at Commodities, especially the price of Crude, and the effect of QE in other central banks to see a bigger picture that matters. The Fed will do what they will. Know better the market’s reaction to their policies than they do!