What is the Fed so terrified of?
For five years we’ve been told that the world was in recovery. “Analysts” and pundits have trotted out every explanation imaginable for why things are in fact great and the markets should go straight up.
On top of this endless and mind-numbing chatter, the Fed has spent over $4 trillion… an amount larger than most sovereign economies. To put this into perspective, the Fed could have spent less money buying EVERY SINGLE ITEM OF ECONOMIC OUTPUT FROM GERMANY FOR A YEAR.
Between this insanity and the endless chatter of the world being great we have to ask… if things are SO great… why is it that even a 10% correction in stocks triggers panic from the Fed?
See the small dot in the chart below? That is the massive drop that caused both Janet Yellen and Fed President Bullard to verbal intervene to hold the markets up. They couldn’t even stomach a dip that barely registers on the five-year monster bull market without assuring the markets that they’d help.
It’s absolutely insane especially when you consider that stocks could have fallen to 14000 on the Dow and STILL been in a bull market.
All of this tells us, in no uncertain terms that the Fed is absolutely panicked about something. What it is, we cannot know for certain, but given that the general public is now aware of the abject fraud, corruption, and incompetence surrounding the bailouts and Fed policies, we can only assume it’s something BIG.
The reality is that the Fed never fixed the last crisis. It never addressed the financial system’s leverage. It never implemented any meaningful reform. The only thing it did was create another bubble.
And we all know how bubbles end.
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