While a Federal Reserve Chairman communicating in a balanced way seems appropriate, the problem lies in the fact the financial markets today are not balanced. The Market only hears what it wants to hear and that is that the Fed is about to save it once again.
With about a month to go, markets sense there’s a good shot at a decent year-end rally. And a solid December would be expected to presage a strong start to 2023. But that would not change my “countertrend” rally view. This market recovery, especially if it gets legs, is problematic.
As fate would have it, the Federal Reserve would restart QE a few months after FTX began operations. The cryptocurrency Bubble was then bestowed with the greatest windfall in the long history of manias and speculative excess: Covid-19.
Reminder: Bull markets never have 4% up days, only Bear markets do. And this one was due to CPI beating expectations due to a massive revision in Healthcare inflation dumped into October numbers.
Powell’s a straight-shooter. He probably planned on a balanced approach, though the more Powell earnestly answered questions, the more his inner Volcker came through.
The war has already begun. China is still in the Shaping phase in the physical sphere, but their economic power and our economic vulnerabilities have been advancing steadily for decades. Is your life and investment portfolio ready.
Most think “lunatic fringe.” Yet, there is nothing as fundamental, vital, as urgent as Sound Money. Stable money and Credit that we can trust; that doesn’t inherently cause trouble; that doesn’t unleash the Scourge of Inflation.
I feel for Liz Truss. She could very well be the shortest-serving Prime Minister in UK history. Central bankers and bond markets have merrily accommodated many a crazy budget. Now they’re running scared, leaving stunned politicians to try to figure out what can work in today’s new reality.
I’m here today with what I believe is a critically important message. The global Bubble – history’s greatest Bubble – is bursting. The previous cycle has ended, and a new cycle has begun to unfold. We are about to commence an adjustment period that I fear will shake us to the core.
Some refer to a “Lehman” or a “Minsky moment.” I call it the “holy crap moment”. Suddenly, things are not as we thought; they might be spiraling out of control, and our government benefactor no longer has an answer.