The Federal Reserve, an organization that even George Orwell would find outrageous, is a Minsky Moment Machine!
A Minsky Moment refers to the onset of a market collapse brought on by the reckless speculative activity that defines an unsustainable bullish period. Minsky Moment crises generally occur because investors, engaging in excessively aggressive speculation, take on additional credit risk during bull markets.
And since Covid and the Great Monetary Expansion to fight it helped creates massive inflation and helps the 1% get wealthier and wealthier. BUT as M2 Money growth slows, the 1% are losing their position as top dogs in the economy. Not by much (see pink circle), but a little.
And The Federal Reserve helps create the monetary expansion through low rate policies, fueling credit and asset bubble expansion. Greenspan, Bernanke and Yellen were the masters at creating a Minsky Moment (named after Hymen Minsky, the late Washington University of St Louis economist).
Then we have the latest bit of bad news. US Industrial Production year-over-year of -0.43% as M2 Money growth evaporates.
After The Fed’s insertion of massive monetary in 2008, continued stimulus until the second massive stimulus burst in 2020, unfunded liabilities of pension funds have worsened. Another possible Minsky Moment created by the Kafkaesque Fed. Kafedesque??
The Fed’s Powell: Let’s play a game … and make the 1% even wealthier!!!
The Fed. The beauty of failure. When the economy starts failing, The Fed goes wild.
