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Emotional Resilience

Peak Insider Alert: All Hell Breaks Loose

user profile picture Chris Martenson Jun 13, 2022
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Right before going to sleep last night, I checked my phone to see how Sunday night futures were doing. The futures screen I check shows them all at a glance.

Stocks, bonds, metals, energy, grains, currencies…

Everything was red. My personal warning signs were all flashing red. Like 2008 all over again. The “trio” showed up which is when I take the signs more seriously, which are

stocks down
bonds down
dollar up

That trio tells me we are in a liquidity crisis. Dollars are in short supply and as a consequence, everything is being sold.

Now that’s perhaps normal in the normal context of a bear market and a recession, both of which are decidedly here now.

But what’s got me on edge is that all of this happened after the Federal Reserve only managed to ever so slightly reduce its balance sheet as seen in the chart below:

See that ever-so-slight dip under that blue arrow?

Apparently, our “markets” are so stretched, so out of touch with reality, that just a minor downtick in Federal Reserve support was sufficient to crash the markets and begin to threaten the system.

Okay, so stocks and bonds can go down as well as up. That’s not exactly news and it shouldn’t be cause for alarm. Concern, yes. Caution, yes. Taking chips off the table and de-risking portfolios, yes. But not alarm. Right?

Here’s my major concern: the Federal Reserve is staffed by weak-kneed bureaucrats who haven’t got a clue about energy or supply chains, and have massively confused rising stock…

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