Main Street

There is a widespread global campaign to eradicate physical cash. And we’ve now got a connected insider confirming it.

The Fed was out in force yesterday peddling some pretty heavy-duty malarkey about the up-coming rate liftoff at the December meeting..."If we begin to raise interest rates, that’s a good thing." That’s not a bad thing." Goldman is putting out the final mullet call for this Bubble Cycle because it knows that this bull is dying; that insiders still have massive amounts of stock winnings to unload; and that the clock is fast running out. The expiring clock is evident in the S&P 500’s one-year round trip to nowhere. Despite the fact that the Fed has ponied-up a stick save at every single meeting this year, the market’s 27 separate efforts to rally have all failed for the simple reason that the jig is up.

"The equilibrium, for now, is QE infinity – but political risk could be the breaking point"...

Sure, the stock market had a great October with the Dow Jones Industrial Average jumping by 8.5%, but the disconnect between Wall Street and Main Street is too stark to ignore, and the Federal Reserve is about to pop the easy-money financial bubble.

While there are many that continue to dismiss individual "economic data points" in order to promote a "bullish bias" for the equity markets, it is more important to accumulate the "weight of evidence." The rising inventory levels, weak consumption, and plunging imports all suggest that the domestic consumer is much weaker than currently believed. The last time this combination of data points collided was just prior to the start of the last recession. But then again, this is where "economic theory" collides with "Main Street realities." Place your bets carefully.

The institutional academic system is broken. We need less systemic, traditional education that only provides knowledge of low utility and more alternative education that provides the right high-utility knowledge to thrive during today's global currency wars.

It's simple - in theory - a central planning body, who knows what is best for the rest of society, lowers interest rates (to reduce the cost of capital, encourage entrepreneurial actvities, and stimuluate the economy - and therefore jobs - for the average joes and josephines of the world). But a funny thing happens when the world is saturated in debt, leveraged to the max, and liquidified by lenders of last resort... the textbook breaks!

Greenspan’s phony disinflation success led to the Fed’s embrace of fully mobilized and massively intrusive monetary policy in the guise of the Great Moderation and the wealth effects theory of financial asset levitation. In due course, Greenspan’s self-aggrandizing but purely experimental forays of massive central bank intrusion in the financial markets were supplanted by the hard-core Keynesian model of Bernanke and Yellen. Alas, they operated under the grand illusion that a domestic wage and price spiral would tell them when the domestic GDP bathtub was filled to the full employment brim, and therefore when to lift their foot from the monetary accelerator. It never happened, and they never did. The era of Lite Touch monetary policy was by now ancient history.

The world of Bubble Finance economies created by the Fed and other central banks is fundamentally different than that prevailing under the “Lite Touch” monetary policies which preceded the Greenspan era. The problem today is that the PhDs running the Fed have an economic model which is a relic of the Lite Touch era. It is not only utterly irrelevant in today’s casino driven system, but is actually tantamount to a blindfold. It causes them to look at a dashboard full of lagging indicators like jobs and GDP components, while ignoring the explosive leading indicators starring them in the face on CNBC. The clueless inhabitants of the Eccles Building do not recognize that they have created a world in which Wall Street supersedes main street.

Good Thing Debt Doesn't Matter! </sarc>

It must be somewhat ironic for the U.S. progressive moment that a day after Obama officially slammed the seal shut on Transcanada's Keystone XL pipeline after a seven year "review" (and days after the company itself withdrew its application, something which the admin ignored just so it could have the final say on the mater), moments ago an oil tanker train derailed north of Alma, Wisconsin along the Mississippi River 80 miles south of Minneapolis, with at least 32 cars off the tracks.

The current stock market melt-up hardly qualifies as limp. Even the robo-machines and hyper-ventilating day traders apparently recognize that their job is to tag the May 2015 highs and then get out of the way. So when and as they complete their pointless mission, the question recurs as to why the posse of fools in the Eccles Building can’t see that they are inflating one hellacious financial bubble; and that when it blows it will deconstruct their entire 7-year project of make-pretend recovery.

“A predicted global meltdown passed without event. But there are enough warning signs to suggest we are sleepwalking into another disaster”.

The Federal Reserve was supposed to serve the nation, however as even Bloomberg observes today, ended up "steamrolling" Main Street. One reason why: directors such as this one. Presenting former Morgan Stanley CEO, James Gorman, whose former employer got a $107 billion loan from the Federal Reserve to avoid implosion.

Yesterday in "$20 Trillion In Government Bonds Yield Under 1%: The Stunning Facts How We Got There", we did just that: showed several "facts" demonstrating how, as Bloomberg puts it this morning, "QE Helped Wall Street Steamroll Main Street." It appears many missed the findings of how central planning has now gone full retard, so here again, are the facts...