We are breathing a lot easier, how about you? We had been worrying that a devastating recession would plunge the US into chaos…losses…and confusion…giving the Fed the smokescreen to go back to what it does best — causing inflation…
What’s great about the US is that anyone can grow up to be president…or win a Nobel Prize. Donald Trump proved the first point. Now, Ben Bernanke has proved the second.
This plea is NOT to central bankers or policymakers. Their bloated egos, gross stupidity, and blatant self-interest rendered them deaf to anything other than fawning (but very much undeserved) applause and accolades. No, dear reader, this plea to stop and listen to history is for you.
The Fed and its member banks funded the federal government by expanding the money supply, lending out newly created dollars — especially to the US Government. GDP growth slowed. But debt growth sped up. In 1980, US debt was still less than US$1 trillion. Now, it is US$31 trillion…and growing fast.
In August, Federal Reserve Chair Jerome Powell warned that bringing inflation under control would mean ‘some pain’ for the economy. But how much exactly?
The world is still the same…humans haven’t changed; we are as dumb and as credulous as ever. But new market conditions require a new anthem. So, we introduce: YODO — you only die once. Today, we explain why this is a YODO market, not a YOLO market.
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