Has the FED Given the Economy Unstable Angina?

I saw this video by George Gammon

He describes something called the No Bueno Zone which is a narrowing of the effective interest rate above which the market machine ceases to work. As we go farther into debt, it’s like the arteries are getting narrowed. What worked before now causes ST depression and angina. At some point ST depression will become ST elevation and infarct will commence. I think this is an important video. The FED just made their balance sheet the balance sheet of the world. Do they really think they can bail out the entire Earth?

4 Replies to “Has the FED Given the Economy Unstable Angina?”

  1. What a strange situation we find ourselves in. Coronavirus, while a serious problem especially to healthcare workers and the elderly, seems to be at worst “only” up to several times more deadly than the seasonal flu. Some young people get unlucky but what we “know” seems driven by extensive media coverage of anecdotes and several dense hotspots. Don’t get me wrong, I realize there will be so much individual and family level tragedy as the pandemic unfolds.

    For this we have wrecked the world economy, starkly decreasing consumer demand and driving unemployment. You seem sure that the central bankers can’t engineer a soft landing this time due to underlying structural problems around debt. What if we are entering a new monetary paradigm?

    I’m debt free and conserving cash for expenses and investment opportunities while still continuing to DCA into global market indexes. Despite token announcements to the contrary, the MMT will get directed to corporations and the financialized economy. “They” (central bankers? deep state?) will do everything they can to get the line back to going up. Avoid the pension funds from going to zero. Keep inflation mostly in financialized assets to the extent possible.

    Yes, I own GLD and BTC. I wish I had land and a homestead to fall back on. I’m an atomized urban professional like most docs. Lucky to be in a mostly crisis resistant profession and working. I still think the underlying system runs deep and that the current crisis will get used to further the system’s interest. “Useful idiots” comes to mind when I hear people repeating what they heard on CNN regarding global warming. I get the same feeling about the coronavirus hysteria. I’m not sure exactly how these things are useful to the system except as a smokescreen while a new monetary paradigm gets rolled out.

    1. Hey ED

      The “Virus” may or may not be “the worst”. If the articles I’ve read about 25% of post virus people having some degree of likely permanent respiratory disability then it’s going to be much worse than we realize. Flu doesn’t turn your lung parenchyma into leather. I just read an article 5 minutes ago the virus directly attacks the kidney through immunologic means. So lemme see lungs shot, kidneys shot, I also read about encephalitis, cardiomyopathy, who knows what else gets shot. The problem seems to be is how this virus engages immunity, in a way that brings about a system wide big gun immunologic response which kills the virus and either kills or maims the host tissue. ARDS is from a too aggressive immunologic response. So I don’t think we can actually characterize this in any way like the flu in terms of prognosis at this point in time.

      Regarding the economy, the whole thing was a house of cards. It was all smoke and mirrors propped up over 30+ years of financial engineering. The virus was merely the stiff WORLD WIDE breeze that blew it all down. You can have a collapse here or there, but a collapse everywhere is a bridge too far. Every market is cracking up. It’s like a leaf heading to the ground, It may slow, it may move lateral but the descent is relentless. Right now I’m making my money day trading SH on down days following up days. I may make 0.5% a day but over the course of a month, 15 down days is +7%.

      The impact of this event is going to last years. I’ve lived through a house fire where everything I owned was destroyed down to the toothbrushes. I’ve lived through many hurricanes and hurricane damage. What we do is rebuild, but we don’t and won’t go back to the way it was. When I burned down my house it took 2 years to feel connected to my life once again. This is a burning down the house event IMHO. Re: the new monetary paradigm that’s why I own BTC

  2. What broker/software do you use for your day trading? I like your idea of trading SH after up days!

    1. I just trade on FIDO and watch the S&P movements on CNN markets. SH is liquid enough that I trade market orders instead of trying to get a limit fill. If I want to go get a nap I just set a stop loss.

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