{"id":397553,"date":"2019-02-28T10:39:05","date_gmt":"2019-02-28T09:39:05","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/newswire\/the-doomsday-scenario-lewrockwell\/"},"modified":"2019-02-28T10:39:05","modified_gmt":"2019-02-28T09:39:05","slug":"the-doomsday-scenario-lewrockwell","status":"publish","type":"post","link":"https:\/\/rinf.com\/alt-news\/newswire\/the-doomsday-scenario-lewrockwell\/","title":{"rendered":"The Doomsday Scenario – LewRockwell"},"content":{"rendered":"
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t \t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n

It was always folly to believe that inflating asset bubbles could solve the structural problems of a post-industrial economy.<\/i><\/p>\n

The Doomsday Scenario for the stock and housing bubbles is simple: the Fed\u2019s magic fails.<\/b>\u00a0When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the deflating bubbles, punters will realize the Fed\u2019s magic only worked the first three times: three bubbles and the game is over.<\/p>\n

So what happens when punters realize there won\u2019t be a fourth bubble? They sell.<\/b>\u00a0Bids disappear because who\u2019s dumb enough to bet (with Japan and Europe as lessons) that more liquidity and negative interest rates will magically work when zero interest rates didn\u2019t move the needle?<\/p>\n

Who\u2019s foolish enough to catch the falling knife (i.e. buying plummeting assets on the way down) on the unsupported assumption that the next dose of Fed magic will reverse a bidless market?
\n\"\"<\/a><\/span><\/span>
\nWhy Our Status Quo Fai…<\/a><\/span><\/span>
\nCharles Hugh Smith<\/span>
\nBest Price: <\/span>$4.31<\/span><\/span>
\nBuy New <\/span>$6.95<\/span><\/span>
\n(as of 06:35 EST – Details<\/span>)<\/span><\/span>
\n<\/a><\/span>
\n<\/span><\/p>\n

And should the Fed start buying stocks, mortgages, housing and bonds to prop up those bidless markets, what\u2019s the message it will be sending? Desperation.<\/b>If the only buyer is the money-printing central bank, that\u2019s pretty good evidence that your economy and markets are in free-fall.<\/p>\n

The loss of faith in central bank magic will be gradual at first, as magical thinking dies hard.<\/b>\u00a0It\u2019s oh so comforting to believe the central bank will rescue every overleveraged mal-investment and bail out every high-risk speculation, but the funny thing about the Fed\u2019s magic is\u00a0it only works in liquidity crises\u2013in every other condition, it only makes matters worse.<\/i><\/p>\n

Does making it cheap to borrow…<\/b><\/p>\n<\/div>\n

Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It was always folly to believe that inflating asset bubbles could solve the structural problems of a post-industrial economy. The Doomsday Scenario for the stock and housing bubbles is simple: the Fed\u2019s magic fails.\u00a0When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[519],"tags":[],"class_list":{"0":"post-397553","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-newswire"},"_links":{"self":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/397553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=397553"}],"version-history":[{"count":0,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/397553\/revisions"}],"wp:attachment":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=397553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=397553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=397553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}