The Fed’s casino isn’t just rigged; it’s criminally unstable.
All the risks generated by gambling with trillions of borrowed and leveraged dollars didn’t actually vanish; they were transferred by the Fed to the entire system.
The lesson of China’s Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable).
All of which sounds very pretty indeed, but it does raise a question: can risk really be destroyed, or can it only be transferred?
Inequality is America’s Monster Id, and we’re continuing to fuel its future rampage daily.
Buyers know there will always be a greater fool willing to pay more for an over-valued asset because the Fed has promised us it will always be the greater fool
As the level of Fed smack and crack needed to maintain the high increases, system fragility increases geometrically.
Borrowing a quarter of the nation’s entire economic output every year to prop up an ineffective, corrupt status quo is putting a Band-Aid over a tumor.
If you think this scale of stimulus is sustainable and consequence-free, you must be mainlining Delusionol.
Oops. Looks like the Fed’s magic (and our luck) have finally run out.