“Way Back When” is an expression that my grandmother used to use in discussing London during WWII when she and her family would congregate in the underground subway tunnels as soon as the air raid sirens began to go off. I use the expression “way back when” to refer to that point in time where market prices were determined by the natural forces of “inputs” such as demand and supply and where demand was actual orders for delivery and consumption (usage) and supply was inventory stockpiled on freight cars or in warehouses.

These were the days before central bank computers could mysteriously create synthetic inventory and sell it as if it was actually present on those freight cars or in those warehouses; they were also the days before the Working Group on Capital Markets created the infamous “Plunge Protection Team” for the express purpose of preventing a 1987-style market crash through the purchase of S&P futures (synthetic stocks). Never again will we see the margin clerks with their visors and round-rimmed glasses toiling away into the wee hours of the morning with a calculator in hand assessing just who was getting margin calls the next morning; computers do that in real time today so that you don’t have to wait until after dinner to find out if you are insolvent or not.

Furthermore, now that the Price Managers can play Space Invaders on their Bloomberg Terminals, trading gold and stock futures with zero personal liability and never a margin call, the capital markets around the globe have been totally corrupted by such a degree of moral hazard that all those bleeps and beeps and buzzers going off are not the sound of an RPG gamer losing a “life” but the sound of a gold producer laying off staff or a bank calling in a credit line. Market behavior is now creating outcomes that have no bearing on the inputs of demand and supply but rather on “policy,” and every time a politician opens his/her mouth or pens an Op-Ed piece, pattern-recognition algorithms explode out of the gate sending buy and sell signals after analyzing multiple word clouds to high-frequency trading terminals creating untold havoc on prices and in record time.