Monday, stocks gained 1.1% in Asia, 0.4% in Europe, and slightly in the U.S. on moderate volume as the VXO dropped 7% to 9.77. “What, me worry?” Tuesday, stocks declined slightly in Asia, 0.3% in Europe, and 0.5% on moderate volume. The VXO reversed gaining 6% to close at 10.40 and precious metals miners lost 3%.
Wednesday, stocks rose slightly in Asia, gained 0.4% in Europe, and 1.1% in the U.S. on high volume. The VXO dropped 5% to close at 9.85 while the 10-Year U.S. Treasury Bond yield slid 3% to close at 2.51. Precious metals jumped 2% while their miners gained four times that amount. All this happened in response to the highly anticipated announcement by the FOMC to raise interest rates 0.25%.
Thursday, stocks gained 1.4% in Aisa, 0.7% in Europe, but closed little changed in the U.S. on strong volume. The VXO fell another 6% to close at the unsustainable level of 9.28. Friday, stocks rose slightly in Europe but closed little changed in Asia and the U.S. on a quad witching day and Saint Patrick’s Day. The VXO remained in la-la land to end the week at 9.35.
This false confidence is fostered by blind trust in central banksters who tell us that after eight years of massive stimulus, the economy still needs popping up by accommodative Fed monetary policy. It is too weak sustain more than a 0.25% interest rate hike now and then, and it’s definitely too weak to begin drawing down of the grotesque Federal Reserve balance sheet as bonds mature. Yet these paragons of wisdom assure investors that they are doing a great job getting the (fake) economy moving again. In reality, they continue to give their zombie bank masters more free money to paper over their bankrupt capital positions while grossly distorting capital markets, robbing savers, and bringing pension funds to the brink of disaster.