Buckets And Tookits, Empty Each

It’s incredible, in a way, because right from the start he’s got everything on his side. There are the media write-ups that all say the exact same thing, calling this an exact science being practiced by the wisest, most considerate stewards. The legend we’ve been raised with. Lore and scholarship (I repeat myself). Most of all, everyone.

When everyone says it’s a very good thing that Jay Powell’s definitely a reckless money printer, our brains aren’t wired to readily believe everyone could be so wrong on both counts (that he is and that it’s good he is). This, of course, explains a whole lot of the darker side of human history.

What monetary policy consists of in this post-GFC2 environment is theoretically very simple – to use the great tools at the Fed’s disposal to ward off further damaging effects. This great toolkit does not include a printing press, rather because it doesn’t it has instead been stocked with all those things listed in the opening paragraph.

To that end, if you believe in the money magic then mainstream convention believes that will be sufficient to prevent a bad situation from becoming worse; maybe, given enough time, to easily get back to good again. If you think Jay Powell is supporting markets, then you sure as hell won’t sell your clients’ stocks and will probably buy more for as much as you can.

Business owners who believe could hold out a little longer, keeping up staffing levels even though their gut instinct tells them something different. Consumers don’t hesitate to make that next purchase they don’t really need to make. The bigger the better, and the faster – inflation, you know.

Most of all, banks and credit investors need to take Jay Powell at his word – that even though it’s absolutely ridiculous to believe the Fed is in any real or rational sense supporting all sorts of risky markets by conducting bond purchases off a predetermined list put together months ago by a committee of bureaucrats, who cares? Lend freely in all corners of the economy while buying up all the junk bonds being offered.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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