Posted on 10/23/2021 3:24:10 PM PDT by Diana in Wisconsin
Unbeknownst to the giddy participants, they're not just betting on the omnipotence of the Fed Politburo, they're also making a max-leverage bet that "the madness of crowds" will never end.
Imagine an economy so dominated by its central bank that all markets hang on every word of its priesthood as life or death. You know, like the Federal Reserve and the American economy.
Now imagine this central bank issues enormous sums of new money which supercharges speculative activity such as hundreds of billions of dollars in stock buybacks, special purpose acquisition casinos, oops, I mean companies, and so on. You know, like the Federal Reserve's trillions in nearly free money for financiers.
Next, imagine that the central bank makes barely concealed promises that should any big gambler lose money in the casino, the bank will flood the financial system with even more nearly free money for financiers and bail out the loser.
Since flooding the system with nearly free money for financiers keeps the speculative frenzy going, the bank has implicitly promised that assets driven higher by speculative frenzy will never be allowed to drop. This promise naturally incentivizes even more speculative borrowing, leverage and risk, generating a titanic Everything Bubble in which risky assets skyrocket from pennies into dollars and dollars into fortunes.
Now imagine that this speculative frenzy spreads into every nook and cranny of the economy such that everyone is drawn into one casino or another, and previously sober, cautious people are seized by a quasi-religious fervor in which they become convinced that their gambling chips on NFTs, SPACs, meme-stocks, obscure alt-coins, homes, collectables and pretty much anything within the manic swirl of speculative frenzy is now a can't lose path to carefree permanent wealth because the central bank guarantees it and anyone who questions this is in league with the Devil (or worse).
Next, imagine that as a result of this vast expansion of "wealth" in the Everything Bubble, the entire economy is now dependent on this bubble never popping as speculation is driving incomes and a wealth effect without precedent as every participant feels newly empowered to borrow and spend more because their bubble-wealth just keeps rocketing higher.
The problem here is all speculative bubbles pop and so the central bank's inflation of a speculative Everything Bubble has backed the entire economy into a corner from which there is no escape: either the bubble must keep inflating to ever dizzier heights of delusion and risk or the bubble pops and lays waste to all the phantom wealth.
Lastly, imagine that the enthralled participants in the speculative orgy truly believe the central bank has the power to keep the Everything Bubble expanding forever, or at a minimum, bubbling along at a permanently high plateau that guarantees everyone's phantom wealth will be forever available for tapping and spending.
This is where we are, and it raises one question: are we really crazy enough to believe this is going to work? That the Federal Reserve can keep the Everything Bubble expanding essentially forever, or bubbling along at a permanently high plateau?
Are we really crazy enough to believe that conjuring trillions of dollars out of thin air and then leveraging this into tens of trillions of dollars and dumping all this money into assets which don't increase in utility so that their "value" rises 10-fold even as their utility remains unchanged is sustainable and a solid foundation for our economy?
Unbeknownst to the giddy participants, they're not just betting on the omnipotence of the Fed Politburo, they're also making a max-leverage bet that the madness of crowds will never end.
Are we really crazy enough to believe this is going to work? The answer appears to be a resounding "yes" because everyone knows the Fed has our backs and so permanently expanding wealth is guaranteed. (And if it isn't, no problem, I'll jump off the merry-go-round before the music stops. And of course, 99.9% of all punters succeed in doing so.)
In this blissful moment of speculative confidence in a) the music will never stop or b) I'll jump off just before the music stops, fortune fully intact, feast your eyes on these charts of guaranteed permanently high plateaus:
Yeah, OK; If a big drop happens, what exactly will fall? Price of houses? Stock Market? Value of the dollar? Price of gasoline? Sky high prices on food at the store? Food at the store going way far higher? Crime goes higher? More assaults? More murders? I am just wondering?...What exactly will happen?
You can’t hide your wealth in stocks or bonds (it will implode). You can’t go to strictly cash (it will be devalued so much as to be worthless). We are sooo screwed.
Bullets, Beans and Gasoline. Also paid-for land and no mortgage will help. No debt. Cash basis where you can. Precious metals. Paid-for cars. Food stash. Sturdy boots and a can opener.
Either way, it looks dire to me. I didn’t see the economic destruction of 2008 coming. We have some fair warning this time around, but things are happening at break-neck speed these days.
Also: We’re So Screwed. :)
“What exactly will happen?”
Who knows? But it ain’t gonna be pretty and it ain’t gonna be fun.
PLAN for the worst and HOPE for the best.
We’ve been told “This can’t go on!” for 50 years.
Luckily I ignored the people saying it.
Now maybe they are finally right, but I’ll ignore them anyway. I’m too old to do anything about it now.
It’s been a great run. When does it end? If you can’t tell me when, it doesn’t matter.
Yes...and scarcity.
The game that is being played here does not belong to the Fed Reserve. It belongs to the World Bank and the Economic Forum.
They fully intend to destroy the USA. There is no other explanation. They and their friends committed an act-of-War against the USA on November 3-4, 2020. Pearl Harbor II. And we have not declared war against them.
So, if the US goes down, most of the world goes down. And it goes down into the most Evil Totalitarianism possible.
Sure, just imagine that EVERYTHING, bread, natural gas, beans, gasoline, even housing becomes like ammo is today... A little here, a little there and WAY too expensive to even consider buying.. Only the rich has that privilege... Sounds like the 30's all over again a'.... :(
“So, if the US goes down, most of the world goes down. And it goes down into the most Evil Totalitarianism possible.”
Yep. Destroying the USA does NOT raise up the rest of the world. We’re the best thing they’ve got!
Not sure why Dr. Evil and his minions don’t understand that!
“They know it. but they don’t care. The think they must “end capitalism”.
Then Globalist Hell begins.
Beans, bibles and bullets will prevail.
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