I read Noland's CBB every Friday.
No fire in crowded theater, but a very nasty outcome from
all of this is unfortunately inevitable. If the Fed and other
CBs come to emergency rescue now and succeed, which may
happen, we'll only have a much bigger bubble to deal with
later. Then we'll have to scream later for the Fed to come
and save us from a much bigger bubble.
We would be better off in the long run if we just let
these bubbles pop, then deal with the consequences the best
way we can. Very hard times ahead, thanks to AG Fed prolonging
and extending the mess forever. Maybe, the Fed can extend
the party once again, then we should be really thankful later.
The market has become a pyramid scheme, it will end like
all pyramid schemes do. No, it won't be much fun at all.
That said, I expect the Fed to panic next week, but it
remains to be seen if they can do anything. The only way
to fix this for real is Volcker way.
What has the Fed achieved? Let's see: they COMPLETELY destroyed
US manufacturing, and created "Service" economy - banking,
hedge funds, Real Estate and such, that feeds off the Fed's printing press
and liquidity. This is NOT productive, in fact, we have been
on the path of total economic destruction for a while now,
thanks to the Fed. It will take a LONG time to rebuild US
manufacturing base. |
