Lemmings jawbone Fed's playbook

I recently wrote about what the beginning of an economic collapse looks like to the average American. I also ran a similar piece for my paper, The New York Post, which was well received, getting more than 100K hits over the Labor Day weekend.

Both writings center on interpreting what the average American may see on a daily basis, but may not notice it or put all of the events together:


“Are you making as much money annually as you did 10 years ago?

Do you see homes in neighborhoods becoming run down as the residents either were foreclosed upon, or the owner lost his or her job so he or she can’t afford to cut the grass or paint the house?

Did that same house where the Joneses once lived now become a rental property, where new people come to live every few months?”

The naysayers to the column emailed or tweeted to me that I was wrong and proceeded to cite government statistics disproving my theist.

I do not cite any stats in the pieces, I was telling my readers to look around your own world and see what is going on. If you see some of these events or circumstances happening, this is why.

I really can’t understand economist or other professional finance people — most of who were the naysayers — not be able to pull themselves away from the official government narrative.

The list of never before happening, grows by the day. A record amount of negative interest rate debt being issued daily. The near decade time frame of the Fed not moving rates but once.

The number of Americans — 94 million — no longer in the workforce. The lost of interest income from any type of savings in the US.

As the list of never-happen-before is realized by the markets, the official Fed narrative becomes simply jawboning to keep the system going.

May naysayers cited the market as proof all is well. I countered that the market is rigged.

The Fed policies are forcing money into equities for the simple reason, that’s where your assets will be treated the best.

This is one of the basic tenets of capital allocation. Cash will go where it’s treated best. If you are getting a 5% return in stocks versus bond returns of less than 1%, then your capital will go to the stock market.

And that is exactly what is happening now. The question is how long can the Fed give equities the red carpet, velvet rope treatment?

I don’t have a direct answer to that, but as I have written lately from mid September through October is the silly season for stocks historically as volatility rises and with this presidential election I think we can extend this season to November.


1 thought on “Lemmings jawbone Fed's playbook

  1. Pingback: Overnight lending squeezed by bond vigilantes | GRAY'S ECONOMY

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