If it does, and eventually it will, watch out. We will enter completely new economic territory. You think things have been wild since 2008? If people truly call out the emperor as naked, if that becomes the consensus, holy moly, are things going to get interesting.
This is a great video. Peter Thiel of Paypal fame (he was also the first investor in Facebook, among other things) speaks of the “slow impoverishment” of the United States through inflation and regulation.
He is dead on.
And then the obvious question is – “Where do the central bankers get all this money?”
Only a few people think about that, and half of the people thinking about it don’t care that this “money” comes from nowhere. All they care about is the next quarter, the next day, the next tick, whatever helps them through their withdrawal.
The “plunge protection team” (PPT) used to be something which was whispered about. Now it’s openly discussed in the New York Post. Hell will become a frost covered plain before the New York Times will ever mention the PPT of course.
As I have written before, there is an understanding among traders post-2008. If the market heads into a nose dive the Fed will intervene. It will actively buy futures (and likely whatever else it has to) in the market to buoy the market.
The PPT is kind of like the Israeli nuclear program. No one acknowledges it officially but almost everyone thinks it exists and as such this impacts markets.
This fundamentally has been the bet of traders of all kinds for the past 3 1/2 years or so. If things get too bad in the markets the Federal Reserve will come to the rescue. The belief is that the Fed is bigger than the market. That come what may the shamans can offer a “wink and a nod” and all will be well. That is what these guys think they saw today.
Ah yes, all the hokus pokus is less magic and more smoke and mirrors. Some of us have said this for a long time. But in the wake of Japan falling back into recession, Europe’s continued depression, China’s slowing, and the ongoing troubles in the United States one gets the sense that on some level the grand poobahs of central banking are just tired. The act can only go on for so long. Sooner or later it has to end. Really the Bank of International Settlements, the central bank of central banks turned on the lights earlier this year.
I mean sure, but what does “massive” really mean? He could have said “super-duper colossal” bubble and that would have been way worse right? It’s not until we’re in super-duper bubble territory that we need to worry? Right?
Gee, where’d everybody go? I have some stocks and bonds I need to sell.
Given that she supported renewing the Export-Import Bank of the United States, Boeing’s bank, one of the most egregious examples of crony capitalism there is, Ms. Warren also chose to support Wall Street. Additionally, her baby the Consumer Financial Financial Board is (illegally?) housed within the Federal Reserve (not subject to Congressional funding oversight) and has become a lobbyist mill already.
Nothing in housing is fixed. The market is still broken. It might even be worse than before 2008. Government activism (via Fanny and Freddy and most importantly the Federal Reserve) screwed up the market initially and caused the Crash. Yet some in the fever panic thought activist government was the answer to the housing crater caused by government activism.
In order for housing to get back to something close to healthy prices needed (need) to crash more. This would have let young buyers in at sustainable levels (even if credit was tight initially) which would have then pushed blood through the real estate sector. Not zombie blood like we have now. But real honest to goodness economic vitality.