Monetary Madness and Rabbit Consumption

Acting-Man

By MN Gordon

Down the Rabbit Hole

“The hurrier I go, the behinder I get,” is oft attributed to the White Rabbit from Lewis Carroll’s, Alice in Wonderland.  Where this axiom appears within the text of the story is a mystery.  But we suspect the White Rabbit must utter it about the time Alice follows him down the rabbit hole.

Pick a rabbit to follow…

No doubt, today’s wage earner knows what it means to work harder, faster, and better, while slip sliding behind.  However, for many wage earners the reasons why may be somewhat mysterious.  At first glance, they may look around and quickly scapegoat foreigners   for their economic woes.

Yet like Wonderland, things are often not as they first appear.  When it comes to today’s financial markets, there is hardly a connection to the real economy at all.  Stock markets are just off record highs, yet 6 in 10 Americans don’t have $500 to cover an unexpected bill.

A curious fellow may look around and find more questions than answers. Where is the money coming from?  Where is it going?

Before he knows it, he’s gone down the rabbit hole where he observes the darnedest things.  He may even discover that the Federal Reserve, with its fiat money, has created and perpetuated insane and incomprehensible levels of debt. And that this, in turn, has blown the economy up into a massive financial bubble.

What bubble? It is perfectly normal for large cap stocks to rise six-fold in a little over eight years. As you can see from the insert, it’s a real thinking man’s market. That means, it is a market that is giving men time to think about other things than the market. After all, it only goes up…  a market for passivists, so to speak, for peaceful Prozac junkies and Valium zombies.  When asked “What do you say to Fed officials who worry about potential bubbles in asset prices?”  former FOMC member Narayana Havenstein recently noted: “I am not convinced that these are major risks to the economy.”  See? Nothing to worry about!  Nothing can go wrong… Ommm… – click to enlarge.

On top of that, if he follows the money, he will see that the Fed’s endeavors have resulted in extreme the concentration of wealth in the hands of the few while looting the many.  Hence, he’s discerned a more accurate reason why the wage earner must run faster and faster while falling further and further behind.

Monetary Madness

Obviously, such a mad system can’t go on forever.  But it can go on much longer than any honest person would dream possible.  The experience since Tricky Dick Nixon closed the gold window nearly 46-years ago bears this out.

Moreover, the experience over the last 8-years, attempting to normalize from ZIRP and QE, confirms the unique ability for madness to persist. In short, monetary policy has gone mad as a hatter.

Its reasons don’t rhyme and its rhymes don’t reason.  Just this week for instance, Fed Chair Janet Yellen raised the price of credit …read more

Source:: Acting Man