Fed broke financial markets; will stimulate the economy at any sign of trouble ...

[GON]

Interesting article.

The thesis of the author is there will not be a long term bear market- ever. The Fed will stimulate the economy to ensure no bear market, by printing money. The author implies the Fed can print money for a very, very long time before hyper inflation takes over.

Below is a picture from the article showing how easy it is for the Fed to "create" 8 billion dollars in seconds.

Bottom line from the article- nobody should be shorting equities.

From the article:
I am an optimist and I am a student of history. You only have to go back to the Global Financial Crisis to realize the rules of the game changed. Time in the market is more important than timing the market.

https://pomp.substack.com/p/quantitative-easing-made-market-bears?

 

[gfh77665]

Yes, long term, equities for the win.

 

[wag123]

Quantitative easing is a ruse that the wealthy oligarchs use to transfer wealth from the middle class to themselves, plain and simple. They used it in 2008, then again in 2020, and they are going to do it again soon.

 

[cptbarkey]

Life skills are more important vs faith in a piece of paper that can be stolen, faked or printed.

 

[Dave Hess]

Next downturn they should pump $30T (trillion) into economy…..

 

[dubber09]

Are they not printing $1T every 80-90 days now already? I thought they did.

 

[PandaBear]

Oh we all know that. Thing is this is not limited to the US Fed, but every single major central bank in the world. Nobody likes taxes, and nobody likes recessions, so inflations and hoping that growth will eventually catch up to the QE is the more popular choices these days.

Sometimes the Fed got lucky when other countries enter recession or depression first, and the USD becomes a safe haven so the inflation is kept under control. Currently the swing trade from Japan is keeping our inflation under control.

 

[Leo99]

Are they not printing $1T every 80-90 days now already? I thought they did.

Not being argumentative. A genuine question as fiat currency evades my comprehension. How does printing money affect anything? Like, where does the money go after they print it?

 

[Rmay635703]

Are they not printing $1T every 80-90 days now already? I thought they did.

In 2020 during the shadow bank bailout they dumped $6T in an instant.

If we loose reserve currency status the printing and wealthy internationals won’t work as everything will go to near zero value both physical assets, currency real and imagined

Not being argumentative. A genuine question as fiat currency evades my comprehension. How does printing money affect anything? Like, where does the money go after they print it?

In the case of the shadow bank crisis it went directly into the pocketbooks of multinational pseudo landlords, holding companies and hedge funds like various entities with black in their name who made bad investment decisions and were crying to the administration to bail them out even though they are a long country mile from being anything remotely FDIC insured .

In turn this war chest partially dumped into real estate, stocks and other bs ruining markets giving these entities as much currency manipulation capabilities as the fed itself until they eventually (possibly decades later) expend the I’ll gotten bailout

 

[bullwinkle]

Not being argumentative. A genuine question as fiat currency evades my comprehension. How does printing money affect anything? Like, where does the money go after they print it?

It goes into the financial system, is multiplied 10X as debt, & drives up the price of literally everything.

 

[bullwinkle]

In 2020 during the shadow bank bailout they dumped $6T in an instant.

If we loose reserve currency status the printing and wealthy internationals won’t work as everything will go to near zero value both physical assets, currency real and imagined

That’s the nightmare scenario-but, considering how much other countries have to lose in USD, I don’t think it’s ever going to happen. It would blow up the entire system.

 

[Rmay635703]

That’s the nightmare scenario-but, considering how much other countries have to lose in USD, I don’t think it’s ever going to happen. It would blow up the entire system.

England lost its status as “a reserve currency “ to us slowly over time until they became completely irrelevant in the 70’s which many Britains remember as hard times with many not even able to afford heat. As their currency became more reliable again it once more is a currency of interest making lives easier in that region.

Before England
France had a reserve currency with much of the world, their influence was slowly lost ending in war upheaval and pestilence.

Both of the above survived, nobody keeps reserve status forever, so the nightmare scenario plays out relatively often, play stupid games win stupid prizes.

You would think humanity would become more intelligent over hundreds of years but the cycles of wars, financial collapse, democratic collapse and housing formation follow moderately long but predictable cycles.
At the end of the day we are animals that follow predictable build bust patterns every 80 years or so.

 

[Dave Hess]

Next downturn they should pump $30T (trillion) into economy…..

*** Correction ***

$70T for next downturn.

 

[SC Maintenance]

Your article is so 2008 / Ben Bernanke.

In 2020 they printed what - at least $18T between fiscal and monetary - and that was just the US, and just what we know about. They ended up with 9% inflation - by their accounting.

So that inflation cat is out of the bag. But that is good - it deflates the $350T of global debt that needs to be inflated away.

@Dave Hess 's estimate for next go around is a bit light.

 

[SC Maintenance]

You would think humanity would become more intelligent over hundreds of years but the cycles of wars, financial collapse, democratic collapse and housing formation follow moderately long but predictable cycles.
At the end of the day we are animals that follow predictable build bust patterns every 80 years or so.

Feature not a bug. The globe's wealth is more concentrated now than ever.

 

[OneLonelyBurrito]

Just thought I would throw out there where the money supply currently stands cause some of the number getting thrown around are completely off base. Source

 

[Vercingetorix]

So many financial geniuses here.
Bob
Is
The
Dow
Guy

 

[OneLonelyBurrito]

Your article is so 2008 / Ben Bernanke.

In 2020 they printed what - at least $18T between fiscal and monetary - and that was just the US, and just what we know about. They ended up with 9% inflation - by their accounting.

Where are you getting the 18T from? I only count ~7T in 2020. About ~4T in money supply and about ~3T in assets.

 

[SC Maintenance]

Just thought I would throw out there where the money supply currently stands cause some of the number getting thrown around are completely off base. SourceView attachment 253482

M2 is just liquid money. Cash, checking accounts, etc. - ie cash and cash equivalents. Its sort of a useless measure given today's world of instant credit, but Steve Hanke keeps trying anyway.

You want to look at debt. Debt is just another form of money - but locked up. You also have to measure as a percentage of GDP (or you can adjust for inflation - either works), but you need to take the inflation piece out of it.

https://www.imf.org/external/datamapper/GDD/2024 Global Debt Monitor.pdf

 

[Rmay635703]

Just thought I would throw out there where the money supply currently stands cause some of the number getting thrown around are completely off base. SourceView attachment 253482

Oh I know most people don’t want to accept that their accepted opinions and narrative of the last 4 years is inaccurate

But what makes you believe the shadow bank bailout that mostly forgave debts with a wink and a nod would directly increase the money supply?

I used to have a hot link to the feds 2020 full balance sheet and things looked far worse than even the graph lets on.