gone up like this market has, on fuel of little lasting substance, will surely come down with enough weight to squash the stupidity that floated it.
Well, actually, the Federal Reserve is doing everything it can to create more of the same…
It’s nearly tripping over itself in the process. I mean that literally. Sometimes you must be explicit about these things; that’s because these are subtle steps our monetary central planners take in their attempts to engineer their preferred outcomes.
Though it’s just some of the background noise amid the Donald’s escalating Trade War/Currency War that’s sure to dominate Bubblevision’s attention, consider, for example, the following…
The Fed is on track to do its final $70 billion of quantitative tightening (QT) in August and September. That’ll suck $70 billion of liquidity from the bond market each month.
It’s likely to be matched by another $300 billion cash drain orchestrated by the Donald’s own Treasury Department.
Steve Mnuchin gets great use of his well-worn kneepads. He’ll need a new set for this one, the ironic downside of the abominable budget-and-debt-ceiling deal the Duopoly hashed out in Imperial Washington two weeks ago.
The Donald’s about to get whacked good and hard by a final blast of QT, this time one with no dilutive offsets.
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