As usual, US stocks are the last to “get it.” But this won’t last for long. The S&P 500 is sitting on the ledge of a massive cliff. And when it finally tumbles, the move will be both fast and violent.
In short, Bernanke bankrupted the US and most Americans in the span of ten years. He created the biggest housing bubble in 100 years and also casue the greatest Crash in 100 years. A few blog entries won’t change this.
Put another way, the financial landscape is now so screwed up by the Central Planners, that investors are actually INCINERATING their money by lending it to Governments.
The Fed may engage in a symbolic rate hike... but we will not enter a truly hawkish period... not when the TBTFs have $551 trillion in interest rate based derivatives outstanding.
The US Dollar took down Oil, commodities, even emerging market currencies. Stocks will be next. The first REAL sign that the 2008 Crash was coming occurred when the US Dollar began to skyrocket in the summer of 2008.
Between 2000 and today, the global bond market has nearly TRIPLED in size. Today, it’s north of $100 trillion in size. And it’s backstopping over $555 trillion in derivatives trades.
The Fed and other Central Banks are trying to maintain the illusion that they have everything in control by talking about interest rates, but the reality is that the US Dollar carry trade is ABOVE $9 trillion in size. That is almost as large as ALL of the money printing that occurred between 2009 and 2013.
