QUANTITATIVE EASING IS PERMANENT…WITHOUT A DOUBT

Headlines:
1. QE = The PERPETUAL CRUTCH For Financial Markets.
2. Federal Reserve = ALWAYS Moving The Goalposts.

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The Absolute Size Of The Federal Reserve’s Balance Sheet = Does Not Matter Anymore.

All You Need To Know = It Will Grow…Indefinitely…Sometimes At A Slower Pace…But Grow It Will.

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Anyway…What Is The Real Point Of Central Banks Supporting Financial Markets With Broad Asset Purchases?

The Belief…Seems To Be…That Higher Financial Asset Prices Boost Consumer Confidence…Thereby Inducing John Q. Public To Spend…Thus Stimulating The Economy With A Demand Impulse.

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And Generally…That Is True.

So What’s The Problem?

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The Problem = THE CONTEMPORARY GLOBAL ECONOMY LIVES ON A PERMANENT SUPPORT SYSTEM DEPENDENT ON CENTRAL BANK MONEY CREATION…

Yet…THE GLOBAL MONETARY INFRA-STRUCTURE WAS NOT DESIGNED FOR THIS TYPE OF UNRELENTING SUPPORT.

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SEEMINGLY INFINITE MONEY CHASING FINITE FINANCIAL ASSETS

…NECESSARILY DISTORTS RATIONAL PRICE DISCOVERY.

Therefore…INDEFINITELY IRRATIONAL FINANCIAL ASSET PRICES.

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So…Central Bank Monetary Policy Has…No Doubt…Changed.

And Seemingly Changed For The Worse…As

  1. Endless Money Is Authoratatively + Historically Inexpensive.
  2. Financial Asset Prices Are Contorted.
  3. Mounting Sovereign Debt Has Ceased To Be A Legitimate Concern.

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And The Rules Governing Central Bank Power?

They’ve Been Dramatically Expanded + Liberalized…So Much So That The Goal-Posts…Measuring Policy Directive + Execution…Are Dimensionally Limitless.

Hence…As A Central Banker…It’s Almost IMPOSSIBLE NOT TO SPLIT THE UPRIGHTS.

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So…Short Term Interest Rates Remain Pinned At Zero + Equities Continue To Launch Higher.

Legacy Valuation Metrics…Are Now Considered Archaic + Revenue Growth Trumps Profitability.

It Seems…The Primary Barrier To Higher Prices Is That The Markets Are ONLY Open For 6.5 Hours/Day + 252 Days/Year.

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You Might Say… “OK…BUT…WHAT ABOUT RISK?

I Could Respond… “What Enduring Risk?”

…That Central Banks Will Not Attempt To Quickly Alleviate.

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You See…It’s Actually Happened…

That Odd Thing That Many/Most Market Participants NEVER THOUGHT POSSIBLE…Back In 2009…At The Onset Of QE In The United States.

That Is…QE…THAT RADICAL MONETARY IDEA 10+ YEARS AGO…IS NOW INSTITUTIONALIZED POLICY…ENORMOUSLY APPLIED.

And Is Currently The ONLY REMEDY…To Cure ANY Market Ill…That Central Bankers Care To Administer.

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Apparently Too…QE Can Help To Solve Social Problems Never Prevously Considered …Including Covid-19 + Global Warming.

Because…Central Bankers Now Believe ANY Dramatic Market Volatility Is  Faultless + That All Shall Be Bailed Out…Regardless Of Sloppy Capital Management Skills.

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And The Almost Daily…Central Banker Public Relations “Spin” …Intends To Reassure Insecure Market Actors.

We Will Offer Unlimited Monetary Support To All Global Financial Asset Markets” …

Is The Primary Message…Artistically Shaped In A Variety Of Verbal Cloaks.

Interpretations Below:

 “WAH WAH WAH” …Asset Purchases
WAH WAH WAH” …Covid
WAH WAH WAH” …Balance Sheet
WAH WAH WAH” …Flatten The Curve
WAH WAH WAH” …Forcefully Use Our Tools
WAH WAH WAH” …Herd Immunity
WAH WAH WAH” …Average Inflation Targeting
WAH WAH WAH” …Masks
WAH WAH WAH” …Quantitative Easing
WAH WAH WAH” …Pandemic
WAH WAH WAH” …Whatever Is Necessary
WAH WAH WAH” …Shelter In Place
WAH WAH WAH” …Zero Interest Rates
WAH WAH WAH” …Social Distancing

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Somehow…Charley Brown’s Simple School Teacher…Successfully Penetrated These “Brainiac” Central Bankers With A Basic + Enduring Lesson =

“The Content Of Your Message To The Flock…Is Not Subject To Any Scrutiny…Just Keep Saying It…And Eventually They’ll Adhere.”

Because Untouchable Authority ALWAYS WINS.

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Contact The Author: Dominate@GlobalSlant.com

THE FED’S MONEY TREE INFINITELY GROWS…DOES NOT SEEM TO “MATTER”

Headline:
Fed’s Parabolic Appetite For Financial Assets = “Laughing Out Loud

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Social Issues [Covid + Race Relations] In The U.S. Are Grabbing Most Of The Mainstream Headlines While The Ignored “Elephant In The Room” = The Federal Reserve’s Titanically Sized Balance Sheet.

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Likely…The Federal Reserve Governors And Regional Presidents Are Hopelessly Giddy…

As Their Unprecedented Money Printing Obsession Is Diverted By A Couple Of Health + Social Side-Shows…Over-Flowing With:

1. Complainers
2. Malcontents
3. Victim Syndromers

…Commanding All…How To Think + Instructing All…What Really Ought To “Matter”...Or Else…Challenging Those That Do Not Adhere To Their “Group-Think”…With Disturbing Threats + Violent Acts.

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All These “Complainers …etc.”…It Seems…Missed A Very Brief + Critical Life Memo That Universally Applies =

Sooner Or Later We ALL Get Screwed…Deserved Or Not.

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Of Course…The Same John Q. Public Whom Has No Idea…And Does Not Care To Ponder…The Enormously Negative Impacts Of A Bulging Central Bank Balance Sheet For Both Themselves + Their Progeny…

Is “All In”…On The Visceral Social Agendas Of The Moment.

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Contact The Author: Dominate@GlobalSlant.com