Someone Please Tell Powell, Yellen And Biden That We Are Going To Need A Lot More “Weimar Money”…
Volatility has returned to Wall Street, and it appears that our absolutely epic stock market bubble may be in serious trouble. The S&P 500 closed down for the fifth trading session in a row on Monday, and that represents the longest losing streak that we have seen since last February. Investors are starting to get quite nervous, because for most of the past year stock prices have gone in just one direction. Even as the real economy has imploded all around us, there has been tremendous euphoria on Wall Street as stock prices have surged to dizzying heights. If stock prices were allowed to crash, that would definitely not be good for the national mood at all.
So what is the solution?
This stock market bubble was originally created by unprecedented intervention by the Federal Reserve and by extremely wild borrowing and spending by the U.S. government, and in order to keep the bubble going we are going to need a lot more of the same.
So someone needs to tell Federal Reserve Chair Jerome Powell that it is time to go “full Weimar” so that we can prop up this bubble for as long as humanly possible.
For a while there in 2020, the Fed’s balance sheet was increasing at a nearly vertical pace, but in recent months it has only been going up at an exponential rate…
If the Fed wants to keep stock prices at their current levels, Powell and his minions need to fire up the engines again.
Meanwhile, the federal government has work to do as well. If our politicians in Washington really want stock prices to remain ridiculously high, they need to send more checks to the American people as soon as possible.
The effects of the last round of checks is already starting to wear off, and retail investors need more “stimulus money” to fritter away in their Robinhood accounts.
The good news for Wall Street is that Treasury Secretary Janet Yellen has reiterated her call for a large stimulus package, and Joe Biden has said that he is ready to sign one into law.
Of course at this point poor old Joe signs anything that his handlers put on his desk.
We haven’t added another trillion dollars to the national debt in a few months, and investors are quite eager to see our grand total cross the 28 trillion dollar mark. Most of them believe that more stimulus money will mean higher stock prices, but more stimulus money will also cause our money supply to grow even larger.
Since the start of the pandemic, M1 has been growing at a rate that would put the Weimar Republic to shame…
When I look at that chart, I feel like I am going to throw up.
But the only way to “save Wall Street” is to throw more giant mountains of money on to the fire. If we don’t go “full Weimar”, stock prices might crash to reasonable levels, and investors would be absolutely horrified.