The bear has actually awakened, and it will not be limited to the stock exchange.
The bear awakens from a long, uneasy rest and the everything bubble remains in difficulty.
I’m not going to make the bear case with charts or price-earnings ratios or belief readings or anything remotely financial. My bear case is a crisis of belief as faith in the faith of the Federal Reserve dissolves and the stunned followers understand the Fed is a failed faith.
To comprehend the faith of the Fed, consider the Federal Reserve policies and actions that the market deem bullish:
— Fed reduces rate of interest: bullish.
— Fed raises interest rates: bullish.
— Fed reduces: bullish.
— Fed tightens: bullish.
— Fed holds stable: bullish.
— Fed alters course: bullish.
— Fed issues assistance: bullish.
— Fed is quiet: bullish.
— Fed sneezes: bullish.
— Fed coughs: bullish.
— Fed captured expert trading: bullish.
— Fed increases wealth inequality to the point it unravels society: bullish.
You understand: simply by occupying the temple of the Fed faith, the Eccles Structure, the Fed is bullish due to the fact that the Fed has the supernatural power to rescind business/ credit cycle and keep the economy and property wealth broadening forever and ever.
The Fed might expose that all policy was decided by Ouija board sessions and the stock exchange would leap: whatever the Fed does is bullish by default. Any policy error can rapidly be reversed and so any decline in possessions can also be reversed. The periodic apostate can be banished and the true believers will once again be rewarded for their faith in the One True Financial Religious Beliefs.
As in the story of the stranger incorrect for a god by the people until a thorn prick draws blood, revealing the complete stranger’s all-too-human mortality, the Fed’s over-reach has effects which are now drawing blood. Shakespeare’s lines are apropos:
By the pricking of my thumbs
Something wicked this way comes.
Just as Macbeth is tricked by promises of invincibility by the witches, so too the Fed has actually been deceived by pledges of godlike powers over finance and the economy. But just as Macbeth’s machinations activated civil war and chaos, the Fed’s over-reach has set a banquet of repercussions that few are prepared to keep down, much less enjoy.
Trying to get rid of business/ credit cycle– i.e. limitless, recession-free expansion— has actually tightly coiled a monetary spring to produce optimum damage when it finally releases its compressed power. In the political-social world, the Fed’s vast growth of the already-wealthy’s extremes of wealth has actually fatally destabilized the country’s democracy and social agreement.
The Fed’s supposedly godlike powers can not fix supply-chain shortages or labor lacks. The Fed can produce currency out of thin air and sluice it into assets owned by the leading 0.1%, however it can’t reshore manufacturing and products supply chains or produce knowledgeable welders, pipefitters, crane operators, and so on out of thin air.
What happens when a faith with such fervent believers is exposed as an empty guarantee of limitless power, a failed faith? The faithful are dazed, distraught, confused and lost, and after that the anger emerges. How could the incorrect gods have failed us so entirely? Where are those who led us so astray?
The bear has awakened, and it will not be limited to the stock market. As the temple of an incorrect faith tumbles, the wrath of the tricked and betrayed will be fantastic undoubtedly.
By the pricking of my thumbs
Something wicked in this manner comes.
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