Recently, Mike Maloney, Grant Williams, Charles Hugh Smith, Chris Martenson and Adam Taggart all convened to tackle the implications of the price distortions that central bank intervention has had on the financial markets.

Back in 2018, each one of us was ringing a bell warning of a massive asset price bubble. 2019, however, only saw prices further shoot the moon (S&P up 28%, Nasdaq up 35%). And ever since ‘Not-QE’ was announced by the US Fed on Oct 8th, the rate of increase has only become more manic.

Exactly WTF is going on?!?

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The harsh simple truth is that those who run the system manipulate it to their benefit.

This is true in both government and industry. Those in power do ‘whatever it takes’ to remain in power and enjoy the fruits of their advantage. Any sort of social ‘duty’ is secondary (at best), and will be sacrificed if necessary.

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This is my last report from the good old “twenty-teens”.

In some respects, they didn’t turn out at all like I thought they would. But in many others, exactly as predicted.

But, given today’s systemic distortions and deformations, predicting the events of the next ten years will be much easier than it was for the twenty-teens. Largely because there’s little room left down the road to kick the can further.

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The Federal Reserve is now directly monetizing US federal debt.

Sure, it’s not admitting to this. And it’s using several technical jinks and jives to offer a pretense that things are otherwise.

But it’s not terribly difficult to predict what’s going to happen next: the Federal Reserve will drop the secrecy and start buying US debt openly.

At a time, mind you, when US fiscal deficits are exploding and foreign buyers are heading for the exits.

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Today we live in a bifurcated economy: it is boom times for some and bust times for others.

Your personal situation depends largely on how close you fall on the socioeconomic spectrum to the protected elite class, towards which the central banks are directing their money-printing firehoses.

Why should we care about this bifurcation? History.

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My business partner Adam and I recently met with a successful business owner whose career began on Wall Street. The kind of guy who should be rooting for the system, because it has treated him well.

Instead, he was quite nervous about the sustainability of the status quo. “Starting in August,” he said, “Maybe it was the Amazon catching fire, maybe it was the negative interest rates – I don’t know for certain what the trigger was – but something has snapped.”

I agree. Because I feel it, too.

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Here we are again. The markets are within a few percentage points of their all-time highs, but just can’t seem to muster the momentum to break out above them.

We saw similar conditions back in March/April and then again in July. Both times, the S&P dropped sharply after failing to remain above 3,000.

Both situations presented profitable opportunities to short stocks.

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The Powers That Be, like central bankers and politicians, are only human. They err. They have to operate with imperfect information.

But they are also mostly untrained in systems thinking, resource limits, and other such necessary fields — which they could correct for if they cared or dared.

But they aren’t. And because of this, the pace and the scope of the changes happening are beyond their powers of comprehension, let alone their powers to fix.

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