MARKETS: (there is no market). By Gregory Mannarino TradersChoice.net

By Gregory Mannarino

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MARKETS: (there is no market).

By Gregory Mannarino TradersChoice.net

Incredible, truly this is…

The gap between any resemblance of reality and “the market” is gone.

Here is the new reality, are you ready for it?

There is no market.  

For there to be a market, there must be a price discovery mechanism behind it.

Let’s define what price discovery is.

Price discovery is the process by which buyers and sellers agree on the current value of an asset. Therefore, price discovery IS essential to the core functioning of the marketplace. Without a real price discovery mechanism, THERE IS NO MARKET.

The marketplace has ONLY one job or purpose, and that is to maintain/determine fair value across the entire spectrum of asset classes.

Fair value.

Consider this for a moment, ask yourself. What is the main driver of price action for assets? Some people would say that it is the interaction of supply and demand which drives the price of an asset(s). Others would say that its fundamental factors like earnings and profitability which drive the market(s). Then there are other considerations like technical factors, macro trends, etc.

Here is a dose of reality for you… take everything that I listed above and just throw it out the window.

Today’s marketplace has been twisted into a freakshow EASY MONEY FREE FOR ALL by the Federal Reserve and other world central banks (who are colluding with so called world leaders) and are HELL BENT on propping up the stock market. Therefore, enriching the 1-2% ELITE CLASS at the expense of the economy, along with the regular guy/gal serfs who have been disenfranchised.

Today’s market, now completely devoid of ANY REAL price discovery, is 100% dependent on the constant flow of EPIC sums of MORE easy money being MAINLINED directly into it via the mechanism of artificially suppressed rates and MASSIVE currency devaluation. This mechanism has, and is, responsible for creating an illusion, or what may be more accurate, a Specter of what is yet to come.

Artificially suppressed rates and currency creation, new “money,” must be created in enormous and ever-increasing amounts for the Fed. to buy/monetize the debt. (Here is a little secret for you). The Fed. monetizing the debt allows “the government” to fund itself. Moreover, this mechanism creates VAST DEBT HYPER-expansion, and therefore makes the Fed. stronger. With that, it is now THE DEBT market which has become THE MAIN DRIVER of the price action of asset prices across the board. Moreover, and directly as a result, EVERY ASSET CLASS OUTSIDE OF THE DEBT MARKET NOW BECOMES A DERIVATIVE! Meaning, that every asset class, ESPECIALLY stock market and real estate price action derives value DIRECTLY from action in the debt market. The result here is and are THE MOST MONSTEROUS STOCK AND REAL ESTATE BUBBLES IN HISTORY.

And here is where this gets even worse.

The same drivers of the stock market, which are responsible for pushing it higher, are the same drivers which are destroying the economy. (And will continue to do so moving forward).

Artificially suppressed rates = POSITIVE for the stock market, and NEGATIVE for the economy.

Weaker currency, as a direct result of artificially suppressed rates, = POSITIVE for the stock market, and NEGATIVE for the economy, (e-CON-omy).

Instead of having a market, we have a GROSS distortion of reality on ANY and EVERY level.

As investors/traders, we will continue to focus on market drivers, (artificially suppressed rates and currency devaluation via easy money), and therefore capitalize on the expected price action distortions.