With the Federal Reserve raising interest rates and unwinding its quantitative easing balance sheet, Russia selling half of its U.S. treasury holdings in the month of April, and a variety of other nations making arrangements to circumvent the dollar, it’s been somewhat counter-intuitive to see U.S. 10-year treasury yields fall from 3.11% in May, to the current level of 2.82%.
(chart courtesy of MarketWatch)
However what becomes more difficult to ignore is the degree to which there is a lot of manipulation in today’s markets. And “dark money pools” that are often not publicly accounted for, and are rumored to be somewhat regularly distorting and propping up the markets.
In my research over the past years I’ve heard more and more whispers about the Exchange Stabilization Fund, and some of the activities it is alleged to be involved in. Which is more fully documented in this excellent five-part series by Market Skeptics.
So if you find that much of the market pricing action often seems counterintuitive to what’s actually going on, watch these videos, and things might start making a lot more sense.
July 6, 2018