I recently wrote an article for Voices of Liberty discussing the fact that the market is addicted to Fed policy. And we’ve had another example of this over the past week. Markets seemed to finally understand that any growth (and there has been very little outside of stock prices) have come by way of debt monetization by the Fed or in other words, money printing. The fact that the money printing is coming to an end this month scared investors into the realization that without money printing everything will fail and so stock prices collapsed 10%.
And so what did the Fed do to? Well they sent several of their regional Fed governors out on the media circuit to start discussing QE4, the next round of money printing. Miraculously the market sell off reversed and stock prices gained back much of what they lost on the news that the Fed may continue to print money. The problem with this entire game is that as the Fed prints money that money turns into debt. In the past 6 years of money printing the nation has more than doubled the entire debt load accumulated over the previous 250 years. That’s right in 6 years we printed more debt than had been accumulated in the previous 250 years. And we still have 13% unemployment (real unemployment using the government’s U6 unemployment – google it if you don’t know what that is). We have declining median household incomes and we have Food and rent prices up by double digit inflation despite televisions and microprocessors getting cheaper. The point is there has been no recovery outside of stock prices. And if the money printing stops that too collapses.
Is building massive amounts of debt that our grandchildren will suffer under worth us delaying the inevitable pain of horrendously destructive policies? Should we not accept the consequence of our own poor decisions rather than forcing that discomfort on our future generations? That debt is not theoretical. It is not just book debt. It is real debt like your credit cards and mortgage. It has to be paid. If it is not it means a default. Defaults and bankruptcies are incredible damaging. And there is no way our future generations will be able to undo what we’ve done in terms of debt. Yet we seem entirely unconcerned about this fact. Your grandchildren will suffer tremendously from our current addiction to money printing and debt monetization. Do you get that? I mean really. Stop and think about your grandchildren and their children suffering financially and that being a direct result of the past 15 years and likely the next 15 years policies. And maybe that’s just it. Perhaps no matter how much any of us yell and scream about the destruction our society is completely deaf to it. We have handed over the reigns to folks that continue to create massive destruction all around us with brief periods of relief and we believe them when they say it is the only way. We know best. Let us do our jobs as we are the experts. Well I am telling you they are not the experts.
They are at best misguided academics and at worst involved in a much larger agenda that has nothing to do with the well being of the 99%. Wake up people. The elite policymakers will always be comfortable as they have given themselves a different set of rules like the ability to trade on inside information for example. But the rest of us will not always be comfortable… or perhaps we will be but then I assure you our future generations will not be. So allow the debt to pile up and bury your heads in the sand. Continue to believe an all time high stock market is evidence the country is healthy but just make sure to ignore the fact that each time a QE program ends stocks collapse until the next round of debt printing occurs. That does not signify health. It signifies addiction. Well carry on folks…. carry on…… and don’t let the thought of your grandchildren bearing the brunt of your apathy put a dent in your day.