This is how tenuous the markets really are. The slightest breeze from the Federal Reserve, the mere hint that the flow of money will slow, sends one of the world’s major stock markets pinwheeling.
At this moment US market futures aren’t looking very good.
Not bad. The economy must be just killing it! No? Well…Then why is the market ripping and roaring? You say they’re handing out free chips at the Fed window and the cards are stacked for the players? Oh excellent. That seems like a good way to run an economy. Pass me a martini.
I like Bitcoin because it decentralizes money. I like it because it is a great experiment in free banking, in free market money. I like it because it directly challenges the central banks.
That last reason is why the government is doing all that it can to kill Bitcoin in the crib.
Money flowing makes people forget. The fear of “missing out” makes people forget. Banks with cheap money buying up real estate assets left and right makes people forget. The housing bubble created by too much cheap money and the ugly bust afterward just a few years ago? Ancient history. And it is ancient history for the banks which were recapitalized by the taxpayer and are now feeling pretty good about themselves as they buy up entire neighborhoods. (The houses formerly owned by taxpayers.)
The end of this thing is going to be nasty. The bust of the current Fed induced delusion will likely be more impactful for many people alive today than the 2008 Crash or the September 11th 2001 attacks. Bill Gross, probably the biggest bond trader in the world sees storm clouds. Gross says that it may not be as bad as 2008, but I’ll bet that in his heart of heart he thinks things will be worse.
Over the last 25 years we’ve gone from one Fed created bubble to the next. Now the central banks of the world are pushing into new frontiers of money printing and they are likely creating a bubble which will result in an unprecedented bust.
Some believe that had Mitt Romney embraced this idea and made it a big deal it would have put him in the White House. That’s probably right.
Zerohedge reports that at least some of the inside guys are actively selling into this rising market. That is when one is supposed to sell. But CNBC says we should be getting on this train.
Wall Street firms have swept in buying up foreclosed homes all over the country with the idea of becoming “super landlords.” If a firm can buy up a a hundred rental units at a reasonable amount with virtually free money (which is likely to remain free for a good while) and then turn around and rent the units to the people who have been foreclosed on, then hey, why not?
This is yet another example of how all the Fed’s printing is benefiting the firms which originally were saved by TARP even though they should have died.
It wasn’t long ago that such an idea was beyond the pale. No longer.
