Ever since 1999 and the tech bubble implosion, Fed-engineered boom/bust cycles have been the most efficacious means for the Wall Street-Federal Reserve Looting Syndicate to transfer the wealth and assets of the increasingly pauperized middle and working classes, i.e. the retail investor muppets, to the Fed’s private equity accomplices. We had the tech bubble bust, the housing bubble bust, and then the 2008 financial crash. Each of these events enabled the already super-wealthy to concentrate even more wealth and power in their own hands, at the expense of everyone else.
Now the Fed has blown the Mother of All Bubbles, while bilking savers out of trillions in interest income with its ZIRP policies that force yield-seekers to gamble in Wall Street’s rigged casino, where they can be fleeced at will. I remind you that in the run-up to the 2008 financial crash, Goldman Sachs traders’ internal communications revealed that they were telling their clients – who they referred to as “muppets” – to invest in mortgage-backed securities (MBS), even as they were secretly betting against them because the traders knew the AAA-rated (by the three captured ratings agencies) MBSs were filled with toxic-waste subprime mortgage crap. (See “The Big Short” for more on such Wall Street financial chicanery).
So here’s the question: are we overdue for yet another Fed-engineered crash, aka another Great Muppet Reaping? All it would take to burst these bubbles is for interest rates to spike, after being artificially suppressed since 2008 by the Fed and central banks based on their bald-faced lies of low or “transitory” inflation. Conversely, if/when the Fed implements yield curve control in an attempt to prevent the bond vigilantes from signaling trouble ahead in the stock market, this risks causing a major loss of investor confidence since these rigged and broken “markets” are totally disconnected from any underlying fundamentals. Deflation is a real possibility as the 99% in our oligarch-looted economy are financially tapped out due to crippling debt burdens coupled with the worsening destruction of their purchasing power by the Fed’s deranged money printing.
A broad market meltdown would be bearish for precious metals, due to liquidation selling on cascading margin calls (margin debt is currently at or near all-time highs). Any sharp drop in PM prices due to forced selling would potentially enable the Fed’s bullion bank market-rigging accomplices to cover some of their massive short positions in gold & silver and go long before the “flight to quality” stampede into the safe haven of physical precious metals begins in earnest as even the dullest of the sheeple start seeing through the Fed’s fiat currency con game and frantically trade their soon-to-be-inflated away Yellen Bux into real money – silver, gold, and platinum group metals.
These insane bubbles have already gone on far longer than I thought possible. Turns out I vastly underestimated how reckless and irresponsible the central banks would be with their Keynesian monetary lunacy while professing to see no bubbles or inflation. So how does this end? I haven’t a clue. Not well, I suspect. To me, the odds seem high of another Fed-engineered bust, or as an uncontrolled “black swan” type crash or even financial collapse event. Too much toxic waste and debt that can never be repaid have built up in the financial system. Factor in things like tens of trillions of derivatives (mostly off balance sheet) and dodgy 2X or 3X leveraged bets for and against the markets, not to mention an incipient pandemic resurgence, out-of-control government spending, and a dangerously polarized body politic with an enraged right and militant far left, and it seems like the level of systemic risk to the financial system and “markets” is off the charts – especially since no Wall Street investment banks or their Fed accomplices were ever held accountable for causing the 2008 great financial crisis, and our policymakers, regulators, and enforcers remain as captured, complicit, or clueless as ever.
As always, not investment advice, just one man’s musings and considered opinion as I look out with growing unease on this daily shit-show. Do your own due diligence, be kind to one another, and stay safe out there.
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