What do governments and central banks do when they don't like what is happening in the financial markets? They directly intervene and they manipulate the financial markets of course. On Friday, the central banks of the G-7 acted in concert to drive down the value of the surging yen. So why did they do this? Well, the fear was that a rising yen would hurt Japanese exports at a time when the economy of Japan needs all of the help that it can get. So, as central banks have been doing with increasing frequency, they directly intervened in the Forex market in order to bring about the result that they desired. Unfortunately, this is not an isolated incident. The truth is that foreign governments, central banks and large financial institutions are constantly manipulating the Forex, precious metals and stock markets all over the globe. You see, in today's global economy the "stakes are so high" that the free market cannot be trusted.
The reality of the matter is that none of the financial markets are really "free markets" anymore. Not that they are completely rigged, but to say that they are very highly manipulated would not be a stretch.
At least this time the manipulation was made public. Of course it would have been really hard to hide the fact that all G-7 central banks intervened in the Forex on the same day.
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