So Was The Chairman Simply Lying?

Tyler Durden's picture

Following today's margin induced collapse in commodities we can't help but wonder if the Chairman's interpretation of crude prices as being merely an indication of the "economist's basic mantra of supply and demand" was wrong, as pretty much all statements by Fed critters, or if he was simply lying.

To wit:

Now, our --- our interpretation of the increase in gas prices is the economist's basic mantra of supply and demand. On the one hand, we have a rapidly growing global economy, emerging market economies are growing very quickly, and their demand for commodities, including oil, is very, very strong.

Indeed, essentially all of the increase in the demand for oil in the last couple years, in the last decade has come from emerging market economies. In the United States, our demand for oil, our imports have actually been going down over time.

So the demand is coming from a growing economy, where we've seen about a 25 percent increase in emerging market output in the last -­ in the last -­ since before the crisis.

And on the supply side, as everybody knows who watches television, we've seen disruptions in the Middle East and North Africa, in Libya and in other places that have constrained supply, supply has not been made up, and that, in turn, has driven gas prices up quite significantly.

Odd, so it is speculators on the way down, and natural supply and demand on the way up. Or maybe the developed world announced today it was not going to use crude any more -  a press release which we admit we must have missed.

And to follow up:

There's not much the Federal Reserve can do about gas prices, per se, at least not without derailing growth entirely, which is certainly not -­ not the right way to go. After all, the Fed can't create more oil. We don't control the growth rates of emerging market economies.

Ah yes, but the Fed can certainly make it clear to the CME to destroy "speculation" in massively cross-linked asset classes. Is that a reasonable assessment of Bernanke's words?

Of course, Bernanke did make it clear that liquidity will keep coming for an extended amount of time, should the economy not pick up, the variable that pushed gold to an all time high. Luckily, that was a week ago, and everyone has forgotten all about that now.


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carbonmutant's picture

Is this a trick question?

Texas Gunslinger's picture

If ZeroHedge is taking the position that the Fed is lying about supply/demand, then wouldn't Zero Hedge have been lying about the role of speculators in the price run?


Hugh G Rection's picture

Thats the problem with trolling Dungslinger, too often you let the mask slip and show your true colors.

lieutenantjohnchard's picture

most people here already understand the plot. the usa government is bankrupt. the fed is the buyer of only resort vis-a-vis treasuries. and much of what one sees and hears from the fed and treasury is an orchestrated phalanx of lies and deception to make people who think and know otherwise that all is well.

bigdumbnugly's picture

was he lying?

his lips were moving weren't they?

DaveyJones's picture

He wasn't simply lying. All his lies are complex

Fish Gone Bad's picture

It is an art to be able to speak out of ones mouth and ass at the same time.  This is a prerequisite for politicians of all flavors.

JW n FL's picture
Republican-controlled committee voted for a 18-month delay of regulations intended to reduce risk in OTC derivatives.
lieutenantjohnchard's picture

do you think he's one of those guys paid to troll zh posting comments to sway the marginal reader? he's written some utterly ridiculous comments. my personal favorite was the one where he told us to think like a ceo - that's chief executive officer for the uninformed he told us.

Fish Gone Bad's picture

That is indeed pretty funny.  Maybe he has a day job translating Mexican salsa signs ("fuego" means "fire" in spanish) as well.

lieutenantjohnchard's picture

zh is a website posting articles and opinions on the financial issues of the day. ben bernanke is the federal reserve chairman of the reserve currency of the world. there's a difference in their mandates. ben bernanke doesn't want to be held accountable for his printing actions.

and of course speculators moved the price of crude up. bernanke all but begged them to speculate through zirp, inflation expectations and money printing.

hambone's picture

Matters not - just look at the REIT's sitting at 2.5 yr highs...ahhhh, safe and sound there...nothing bad could ever happen to the REIT's.

And then there's the Russell 2000- up on the day. and sound.

lieutenantjohnchard's picture

survivor bias in some of the reit's in the total return. but i get your point.

carbonmutant's picture

You need to take the gun out of the holster before you pull the trigger...

Arrowflinger's picture

The trick question is whether this buying opportunity will be as transitory as Bearnanny's credibility.

max2205's picture


Gubbmint Cheese's picture

Lying? Ben Bernanke?? No. I absolutely believe him. I absolutely believe that the Fed Chairman could not possibly know there was a housing bubble in the making.. or that QE doesn't cause inflation.. or......


Re-Discovery's picture

"Was he lying?" Hmmm...  That's a tough one, let me consult my algo.

My algo has a two prong decsision tree on that:

Question 1  - Was his mouth shut, if "yes", then "no"; if no then Question 2

Question 2 - Did he say anything, if "yes" then "yes"

Algo will trade on the decision that Bernanke was, in fact, lying.





mogul rider's picture

Yup squeezing dickheads who went 100:1 leverage on commodities is a bad thing.


I mean c'mon why lower the risk any.

Dont Taze Me Bro's picture

Yeah thats true, leverage is a double edge sword for sure, but having a lot of trading desks blowing up is not a good thing either.


Urban Redneck's picture

If there is an explosion on the trading room floor all leverage is automatically off loaded to the FED balance sheet per revised business (profit & bonus) continuity plan.

Dont Taze Me Bro's picture

Sad but true. The only sucker left holding the bag at the end of the day is the US tax payer.


tekhneek's picture

Transitorial truth I believe it's called.

CPL's picture

Until next week when a new truth shall be revealed to all.

Gubbmint Cheese's picture

if only they increased the margins on oil to protect investors from getting carried away.....



Popo's picture

This is the problem with parsing economic trends from granular price movements.   ZH / Tyler is as guilty as anyone else on this issue.   If it's not oil, it's silver, gold, treasuries or equities...

When silver soars, it's inflation of course.   But what about when silver plunges?  Is that deflation?  disinflation?  Or no wait ... it's a "take down".  Yeah that's it.  Rises are due to inflation, and drops are (of course) "manipulation".  

Sigh. The old saw never changes.   But it always cuts poorly.

Any market with sufficient volatility provides infinite ammunition for all opposing theses.

Construct's picture

Well 'they' did hike margin five times in one week in Silver. And given how equities are doing nothing to the down side while PM go down almost 30% then yeah that does scream 'manipulation'.

EscapeKey's picture

Nooo, there's nothing suspicious about an equities markets staying static, while commodities are collapsing, in an environment where the central bank rigs the bond markets.

No manipulation whatsoever, those who think so are clearly conspiracy theorists.

DUNTHAT's picture

And with the Dollar launching !!!

txapela's picture

It took silver 9 years to go from $5 to $50. That might be inflation.


then again..


It took silver 3 days to go from $50 to $35.


That is, conveniently, deflation.


Right. Right. Moving along now.

Popo's picture

Rather convenient manipulation of the X axis don't you think, my friend?

How'd silver do in the last 6 months?  Was that all inflation? 


benburnyanki's picture

look ninkumpoopo if you try and daytrade comodities, it will surely bite you in dee a**.

However if you just ring big T and ask to buy the metals for ya, he will lock you in a good price based on current bid/ask. No don't be a don't bee and sell it in a week or you being beside da point. Buy metal and sit on um it kimosabe.

Oh I see Popo, you wouldn't be postin from the Jacuzzi over at the Rothschild's mansion with the 12 year old naked girls tied up in it monseur?

No mo day tradin and then winin', jesus you worse than a troll almost.


Dr. Porkchop's picture

I'd take advice from a pirate on PMs anyday over the paper pushers.

Popo's picture

> "Oh I see Popo, you wouldn't be postin from the Jacuzzi over at the Rothschild's mansion with the 12 year old naked girls tied up in it monseur?"

Yes.  Yes, that's exactly me.  Hello from the underage sex-party.   Could you send over some more Grey Poupon?

I love how all opposing non-mainstream theses are instantly labeled as "mainstream".  

If you're not a goldbug, you're a Rothschild, eh?   Lulz sonny.   Pull up a graph of M2 lately?     

Something's going to bite you in the ass.  It's not a dog, but does begin with a 'D'.





Whalley World's picture



Look at the Silver chart and tell me this was a bunch of day traders deciding to hit sell at the same time.  The rat is trapped and is fighting back hard.  The fundo's for Silver have never  been better, just check out Harvey Organ's blog. to check OI

Maybe I will sell my vault full of silver and exchange it for green toilet paper, or wait maybe not!

EscapeKey's picture

yeah i applaud the raids. a bit further down, and i start buying more physical.

Construct's picture

At the end of the day who cares? If you go long Silver here without any leverage it matters not what their number for pushing down Silver to is. They wont be able to shake you out if you have paper silver without leverage or physical silver.

Smiddywesson's picture

Until this little display comes to an end, short paper gold, long physical gold.  Divert profits into more physical gold.  Sleep well at night.

benburnyanki's picture

I know some trolls out there are lurkin' but not sure about Popo.

I know you sheep head fucker Rothschilds just dumped about 1/100000th of a % of your gold and silver on the markets to make sheep shit hit the wall to scare the bejesus out of them so they start using fake Fiat dollars again and run from PM's)

In foot ball USA way they call this play a 'hail mary' since the JPM front for the Rothschilds owns too many puts on silver and gold for decades to keep price of PM low artificially. Therefore the R's been selling huge boatloads of Silver and Gold to trick everyone else to sell and then they can unwind their short pos. and go home and u know what 12 year olds stress free again.

Popo's picture

You've got me nailed, pirate boy.  I am Baron de Rothschild.   I love Zero Hedge because it's such a wonderful example of conformity of thought.    It gives me hope for another empire one day.

Now... back to counting my billions.   And you pirate boy, must get back making french fries.  Break time is over. 

NOTW777's picture

we're not monetizing debt, right?  that was true, right?

apberusdisvet's picture

Well they can slam the PMs, so why not oil?  They really are the Masters of the Universe.  Can they do something about my property taxes?

Alcoholic Native American's picture

Yea, raise them, they are not sure if local governments are too big to fail yet. They will try to squeeze the last juice out of the plebes that fell for the "ownership society".

Hugh G Rection's picture

Long Live Chairman MaoNanke!


You are insolent swine for questioning our supreme monetary wizard chief!

uhb's picture


Buying PMs is an insurance. Thou shall not buy insurance on leverage: thou shall buy your insurance physically so that you shall sleep well.