McRocket
Gold Member
- Apr 4, 2018
- 5,031
- 707
- 275
- Banned
- #1
Authored by Sven Henrich via NorthmanTrader.com,
'Game over. The grand central bank experiment of the last 10 years has ended in utter and complete failure. The games of cheap money and constant intervention that have brought you record global debt to the tune of $250 trillion and record wealth inequality are about to embark on a new round of peddling blue meth again.
Australia has already cut, so has India. The ECB is talking about it, markets are already pricing in multiple Fed cuts. The new global rate cutting cycle begins anew before the last one ever ended. Brace yourselves as no one, absolutely no one, can know how this will turn out.
Draghi: Several members of the Governing Council raised the possibility of rate cuts, others the possibility of restarting the APP or the extension of forward guidance
This is not capitalism, nor does this ongoing farce constitute free market price discovery. It’s politburo based central planning, desperately trying to keep the balls in the air.
“To extend the business cycle” Jay Powell stated this week. Since when is this the primary purpose of the Fed? What happened to inflation and price stability? Already they are tossing their stated inflation goals and are talking about letting inflations run hotter if they can juice it up. There’s no integrity, only moving targets and carrots driven by equity prices.
The pretense is gone, it’s all about keeping the illusion alive that the Fed knows what it’s doing, that it’s always there to save markets from any trouble.
But its track record is obvious: It has failed to meet its inflation targets (ill guided as they may be) for 10 years. It has failed to normalize despite years of promises to do so, and will never be able to normalize. Between 2008-2019 the Fed was non-accommodative for 3 months. It blew up in their faces in December. They’ll never be non accommodative again. They can’t.
This week investors are happy to chase the coming free money train again. They may well be rewarded for the same gig that has worked for 10 years with the consequences already apparent: Ever more record government, corporate and consumer debt and yes, ever more extreme wealth inequality. Bravo.
Alternatively investors may want to exercise caution in chasing policy failure, but rather keep an eye on technicals that may well point to a different result:
While markets will negotiate the ultimate outcome the verdict on the policy front is already in: Game over. The grand central bank experiment has been revealed to be a colossal failure. Brace yourselves.'
"Game Over!"
The grand plan that many people - including me - from Day 1 have said was nothing but a disastrous house of cards from the Fed...is finally beginning to collapse.
Oh, it will take a LONG time to finally crash...maybe over a decade.
But the Fed just proved that it's grand experiment - that began under Bernanke - was a complete failure as rates almost certainly will start to fall again. And the economy NEVER got over 3% GDP growth for a FY before it's artificial 'boom' petered out. Yet the amount of debt that has accumulated is unprecedented and enormous.
And now, the Fed is trapped. They cannot let that giant, debt monster out or it will wreck the economy. So they HAVE to keep the economy propped up.
And when rates go down again over the next little while...that faint sound you hear will be Ben Bernanke saying - under his breath - 'oops'.
'Game over. The grand central bank experiment of the last 10 years has ended in utter and complete failure. The games of cheap money and constant intervention that have brought you record global debt to the tune of $250 trillion and record wealth inequality are about to embark on a new round of peddling blue meth again.
Australia has already cut, so has India. The ECB is talking about it, markets are already pricing in multiple Fed cuts. The new global rate cutting cycle begins anew before the last one ever ended. Brace yourselves as no one, absolutely no one, can know how this will turn out.
Draghi: Several members of the Governing Council raised the possibility of rate cuts, others the possibility of restarting the APP or the extension of forward guidance
This is not capitalism, nor does this ongoing farce constitute free market price discovery. It’s politburo based central planning, desperately trying to keep the balls in the air.
“To extend the business cycle” Jay Powell stated this week. Since when is this the primary purpose of the Fed? What happened to inflation and price stability? Already they are tossing their stated inflation goals and are talking about letting inflations run hotter if they can juice it up. There’s no integrity, only moving targets and carrots driven by equity prices.
The pretense is gone, it’s all about keeping the illusion alive that the Fed knows what it’s doing, that it’s always there to save markets from any trouble.
But its track record is obvious: It has failed to meet its inflation targets (ill guided as they may be) for 10 years. It has failed to normalize despite years of promises to do so, and will never be able to normalize. Between 2008-2019 the Fed was non-accommodative for 3 months. It blew up in their faces in December. They’ll never be non accommodative again. They can’t.
This week investors are happy to chase the coming free money train again. They may well be rewarded for the same gig that has worked for 10 years with the consequences already apparent: Ever more record government, corporate and consumer debt and yes, ever more extreme wealth inequality. Bravo.
Alternatively investors may want to exercise caution in chasing policy failure, but rather keep an eye on technicals that may well point to a different result:
While markets will negotiate the ultimate outcome the verdict on the policy front is already in: Game over. The grand central bank experiment has been revealed to be a colossal failure. Brace yourselves.'
"Game Over!"
The grand plan that many people - including me - from Day 1 have said was nothing but a disastrous house of cards from the Fed...is finally beginning to collapse.
Oh, it will take a LONG time to finally crash...maybe over a decade.
But the Fed just proved that it's grand experiment - that began under Bernanke - was a complete failure as rates almost certainly will start to fall again. And the economy NEVER got over 3% GDP growth for a FY before it's artificial 'boom' petered out. Yet the amount of debt that has accumulated is unprecedented and enormous.
And now, the Fed is trapped. They cannot let that giant, debt monster out or it will wreck the economy. So they HAVE to keep the economy propped up.
And when rates go down again over the next little while...that faint sound you hear will be Ben Bernanke saying - under his breath - 'oops'.
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