The Fed's Endless Wall Street Bailout

Since the Fed can inject "liquidity" into the financial markets, but can't determine with precision where those funds end up, I suspect that at least some of the Fed's money-printing is finding its way into commodity markets as well. In other words, the Fed's clumsy hand is fueling another commodity bubble! The below document was dated August 2009, and this is only an excerpt of the Executive Summary. 

from Precision Capital Management:

The theory for which we have the greatest supporting evidence of manipulation surrounds the fact that the Federal Reserve Bank of New York (FRNY) began conducting permanent open market operations (POMO) on March 25, 2009 and has conducted 42 to date. Thanks to Thanassis Stathopoulos and Billy O’Nair for alerting us to the POMO Effect discovery and the development of associated trading edges. These auctions are conducted from about 10:30 am to 11:00 am on pre-announced days. In such auctions, the FRNY permanently purchases Treasury securities from selected dealers, with the total purchase amount for a day ranging from about $1.5 B to $7.5 B. These days are highly correlated with strong paint-the-tape closes, with the theory being that the large institutions that receive the capital injections are able to leverage this money by 100 to 500 times and then use it to ramp equities.