Today's must watch clip comes from Mark Fisher. Key highlights: "QE2 can't end right. Worthless paper after endless paper.... What's good for the equity markets is not necessarily good for the economy. The equity markets are not going to create jobs. If you have a paper bag full of money are you going to go out and hire workers and take risk with healthcare and all these other regulatory restrictions? No, you are going to go ahead and buy high yield, you will buy equities, you will buy risk assets. The fallacy in the whole thing is that you are not going to go ahead and create jobs just by pushing up the market by 20%, 15%. In fact, to some degree by pushing up commodity price to levels that are going to be obscene, which is what is going to happen, you are hurting everybody in mainstream America... If you have all this money coming into the system, and this money stays in the equity and commodity markets, when at some point you take this money out of the system, where is this money going to come out of? Parabolic moves have Parabolic corrections. This is going to end bad. It is not a matter of if, just a matter of when. This is going to be the ultimate bubble, this is going to make 2000 look like a cakewalk. This is going to be the bubble of all bubbles."
Fisher is absolutely correct. The argument is pretty simple - if the Fed was right, it would just print a quadrillion $ right now, openly buy every single security, monetize every single bond ever, and presto: full unemployment, no slack, and a perfectly functioning economy. In other words, Utopia, through the magic of central planning.
When did this fail last time it was attempted? And how many years have we been saying this is precisely the key fallacy in the Fed's thought process. But this is so obvious, the Chairman will obviously never grasp it.
This video has to go viral.
And some more thoughts on commodities: