Executive Summary

• It's Time To Name The Guilty
• The Gross Global Mis-Pricing Of Risk
• The New Fed Looks Even Worse Than The Old
• What You Should Do To Prepare

If you have not yet read Part 1: You're Just Not Prepared For What’s Coming, available free to all readers, please click here to read it first.

The Federal Reserve Is Neither

I really despise the fact that I am still here, after all these years warning of something that never seems to come.  Perhaps I should just stop.  Those who could have heard the message by now probably already have, while those who have not, probably never will.  Not until it’s too late.  But still I persist.  It’s a character trait…or flaw.

It’s getting harder and harder to not find people talking about “when the stock market finally corrects” or the ever-worsening international situations.  People know this is all wrong, markets are not supposed to simply climb upwards at an 80-degree angle month after month, but nobody knows when it’s all going to break.  We just know something is amiss and increasingly people are nervous and worried.  As they should be.

So I just want to raise my hand here and say that I am in favor of handing out serious punishments to the central bankers who negligently placed all but a very tiny few directly into harm’s way, knowingly and maliciously.  They knew they were harming pensions, savers, retirees, the young, the poor and the middle-classes.   They knew what they were doing was harming an entire generation of young people, fostering a deeply unfair and ultimately dangerous wealth and income gap, and backstopping bank losses even (especially?) when those banks did stupid things that deserved losses. 

Yet they they knowingly carried on anyway.  And here we are, with the third set of bubbles in 20 years and the largest wealth and income gaps in all of history.  I say the people responsible should be held accountable.  Finally.

This Time Is Going To Be Different?

When these bubbles burst, and trust me they will, the aftermath is going to be especially ugly.  Like all bubbles, we’ll discover that a vast amount of lending took place towards ideas and projects and in support of spending habits that really should not have been undertaken.