This week the Federal Reserve said something that in any other monetary era would have caused a panic. But in today’s bizarro world, it was seen as an attempt at reassurance.
To paraphrase (just barely): The economy will grow strongly, official inflation is heading to 3% and beyond, but interest rates won’t rise for another couple of years at least.
And this comes after a year in which 60% of all the US dollars ever created since the country’s founding were conjured out of thin air and dumped into the economy(!)
Meanwhile, over on the fiscal side of the orgy, the current nearly-$2 trillion stimulus bill will soon be followed by an even bigger infrastructure program, all financed with newly-created dollars:
The result, if the above actually happens, will be an environment where it’s pretty easy to envision the dominant investment theme:
Scarcity
Normally, almost by definition, money is THE singularly scarce thing in a market-based society.
So what happens when money stops being scarce because the world’s governments are mailing out checks, buying up bonds and stocks, forgiving debts, and generally foisting cash on anyone with a heartbeat and voter registration card?
Well, then scarcity itself becomes scarce.
So we’ve apparently entered a time when, in order to be “valuable,” an asset doesn’t have to be useful and scarce. It just has to be scarce.
by tdhilmil7 
