This morning the Federal Reserve decided to attempt to go Full Bernanke despite the warnings from the markets and Hollywood:
Yet Jay Powell went Full Bernanke.
And the markets loved it for about 45 minutes. Then the bond yields started to crash, burn, and set historic levels; with the lowest yields in history, not what the Federal Reserve had in mind.
Discussing what happened to the equity markets after this idiotic move is irrelevant boys and girls, watch what the smart money does, not what they say.
How bad was it and is it this morning? Here is your 5 minute chart courtesy of Investing.com of the 2 and 10 year U.S. Treasury yields:
Just holy smokes. The charts do not even do justice to the damage done to our financial system in the past week other than illustrating that the Federal Reserve’s “fear of disinflation” is actually going to create a massive deflationary wave which will not only strengthen the U.S. dollar and gold prices simultaneously, but in the end wipe out the hard earned fiat asset valuations of retirees, property owners, and other fiat investments for the last 20 years.
By creating this myth that low interest rates stimulate economic growth, the Federal Reserve’s Keynesian delusion that they can prevent the next “Great Depression” by Japanification may well indeed usher in the next depression and worse, stifle economic expansion globally for over a decade. All because America is about to endure a pandemic created by some Chinese communist lab in BFE.
Killing the U.S. economy is not the cure and as will soon be demonstrated by theoretical politcal-economic policies implemented by technocrats and global organs, the massive monetary inflation in the end will only deflate asset prices and destroy the livelihoods of retirees far quicker than the virus which may well kill up to 19% of them.
Nice job, central banksters.