Saturday, June 23, 2012

Eric Sprott: Ministry of [Un]Truth

Sprott Asset Management has released its latest Markets At a Glance newsletter to email subscribers,
Ministry of [Un]Truth

By: Eric Sprott & David Baker

Speaking at a Brussels conference back in April 2011, Eurogroup President Jean Claude Juncker notably stated during a panel discussion that “when it becomes serious, you have to lie.” He was referring to situations where the act of “pre-indicating” decisions on eurozone policy could fuel speculation that could harm the markets and undermine their policies’ effectiveness.
Everyone understands that the authorities sometimes lie in order to promote calm in the markets, but it was unexpected to hear such a high-level official actually admit to doing so. They’re not supposed to admit that they lie. It is also somewhat disconcerting given the fact that virtually every economic event we have lived through since that time can very easily be described as “serious”.
Bank runs in Spain and Greece are indeed “serious”, as is the weak economic data now emanating from Europe, the US and China.Should we assume that the authorities have been lying more frequently than usual over the past year?

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