Tag Archives: asset bubbles

Dawn J. Bennett Discusses Central Bank-Driven Monetary Policy & Market Manipulation

Summer sunlight and soap bubbles

Are you familiar with the classic song “I’m Forever Blowing Bubbles”? One verse reads, “I’m forever blowing bubbles, Pretty bubbles in the air, They fly so high, Nearly reach the sky, Then like my dreams, They fade and die.” In a recent article by financial expert Dawn J. Bennett, she explains that this song could well be the theme song for central bank-driven monetary policy and market manipulation. However, unlike the bubbles in the song, asset bubbles won’t fade. Instead, they’ll explode, causing a significant amount of collateral damage, according to Bennett, who says there have been numerous warning signs indicating this will occur soon.

Bennett notes that Mark Spitznagel, billionaire hedge fund manager, told the Financial Times that “markets don’t have a purpose any more — they just reflect whatever central planners want them to.” He then continued to say, “This is the greatest monetary experiment in history. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable.”

Spitznagel isn’t the only one with this perception. In her article, Bennett explains,”The Bank of Japan, acknowledging the violence being done to the yen by years of quantitative easing, said recently that they are setting aside money to prepare for losses on their huge holdings of Japanese government bonds which were put together and purchased through their printing of fiat currency once they are finally forced to stop monetary easing. Easing is a vortex that has sucked in the central banks over the last eight years, forcing them to continue blowing bubbles to follow bubbles to follow bubbles.”

She continued, “There have been calls even for our own Federal Reserve to go beyond QE to ‘helicopter money’, essentially going beyond interest rate manipulation and money printing by injecting ‘permanent’ money directly into private sector. Could this be why China is establishing a yuan-denominated gold benchmark for trading, in order to start backing their currency with real assets instead of academic theories?”

The U.S. derivatives market the largest bubble in history, says Bennett. It’s worth more than $1 quadrillion dollars in total by some accounts— approximately 20x the value of the whole world economy.

“It’s sheer gambling, including not just equities but physical commodities. The legality is questionable in many cases, but the problem is definitely real and indisputable.”