The battle continues to rage between the natural forces of markets and the unnatural manipulations of the central planners during 2014. The market forces took the trophy for the first half of the year, and the central planners came back with a meat ax in the third quarter….
In the first half of the year, the HUI Gold Mining Index turned in a 22 percent performance and oil rose 14 percent. In that same time the Standard & Poor’s 500 Index, the central planners’ favorite, rose 6 percent. A much broader stock index, the Russell 2000, generated a modest 3 percent gain.
In the third quarter the central planners fought back with their apparently unlimited and unregulated arsenal of derivatives to extinguish the outperformance of the HUI and oil. The HUI is now showing a negative performance of 4 percent and oil is now negative by 2 percent. Despite all the hoopla we see on TV about the performance of stocks and despite the efforts of the central banks to print money to buy stocks, the S&P 500 remains unchanged since the end of the second quarter. The Russell 2000 Index stands negative by 5 percent.
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