Oh what a tangled web we weave......Propping up the market.....stoking exuberance and animal spirits?

I read a wonderful daily newsletter called the Daily Pfennig written by Chuck Butler. Chuck is a currency and metals guy retired, but still with his eye on the markets and the economy,. (I recommend the newsletter a lot)

This issue mentioned another article titled: "Rumors Grow that the U.S. Fed is Propping Up the Stock Market" about the Federal Reserve and other world central banks working to "prop-up" stocks, and the US market in particular. I recommend that article also, thought I am not sure many will be surprised to read it.

I think the issue is that we are all getting "numb" to some of these manipulations, and the key we need to remember is that the economic system stays in "balance" because of all the natural fear / greed forces that work against each other. But if these systems are themselves manipulated so that the proper fear / greed signals are being blocked or somehow enhanced so that those involved don't get the proper feedback....well, like the person who takes pain killers after an operation, they very well might rip the stitches in their new incision because they have no sense of pain from a particular movement they might make.

IMHO: We currently have great pressure building up around huge personal and public debt....and we should be feeling the pain of higher interest rates telling us to slow down and reverse our course....but these are manipulated so that they don't exert the normal pain.....our punch is spiked, and we don't get the proper feedback.

But some day, we might get that feedback in the form of an open wound due to our ripped stitches.... but at that point, we might well have a "gusher".....so please play it all conservatively.