The Federal Reserve is now in “extreme easing” mode, having printed up nearly $3 trillion in thin-air money just this year alone. It’s not a stretch to expect the value of the dollar to decline even more precipitously from here than current estimates predict.

So, in a world where the Fed is considered by many to BE the market, backstopping investors and stepping in at a moments notice to prevent losses, what is the Fed most likely to do from here?

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In addition to presenting a major public health risk, the coronavirus is already doing serious economic damage. China, the world’s second-largest economy, is essentially “closed for business” right now.

The disruption to global trade the coronavirus is likely to cause is going to be material, perhaps severe. And that will have serious negative consequences for the financial markets, which have been (and is still!) trading at the highest valuations in history.

The coronavirus has all the hallmarks of a true Black Swan event.

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The US Federal Reserve is once again force-feeding liquidity into the system. At its fastest rate ever.

The result? Record high stock prices whose valuations defy all logic.

What’s wrong with that? Shouldn’t we just enjoy the party and be grateful for our rising 401ks?

What’s wrong is that the Fed’s actions are dooming us. Their poisonous cocktail of endless cheap money and rock-bottom interest rates is hastening a terminal breakdown of the economy, while deliberately enriching a tiny cadre of elites to the ruin of everyone else.

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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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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 only thing nearly as enlightening as reading David Collum’s epic Year In Review is listening to him and Chris Martenson riff about its highlights.

Strap in, grab some eggnog, and listen to this year’s recap.

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Every year, friend-of-the-site David Collum writes a detailed “Year in Review” synopsis full of keen perspective and plenty of wit.

This year’s is no exception.

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