Kaltbaum on The Fed Boxed In like Mixed Nuts

BY GARY KALTBAUM- DECEMBER 14, 2021

We urge you to listen to our radio show every day but in particular, please listen to the last 18 minutes of yesterday’s show.

https://www.spreaker.com/user/biztalk/ie-121321

The worst of problems may be here. It is the problem we have outlined for 18 months. It is simple. WHAT IF MR. BUBBLE IS FORCED INTO RAISING RATES BECAUSE OF ALL THE DISTORTIONS HE HAS CREATED WITH HIS MANIACAL (AND WE MEAN MANIACAL) MONEY PRINTING MACHINE?

Money printing creates bubbles all over the place.

Money printing creates inordinate moves. GAMESTOP, AMC, COINS, NO SALES COMPANIES, SPACS, NFTs, CARDS, ART, HOUSING, JUNK BOND YIELDS THAT SHOULD BE PAYING 9% BUT PAYING 5%. JUNK BOND YIELDS THAT SHOULD BE PAYING 5% BUT PAYING 2%…the list goes on and on. Many of the bubbles topped in February with lots down 50-90%. Yes…90%.

So….

Money printers never see the inflation coming.

When inflation hits, money printers tell us it’s much ado about nothing.

When inflation sticks a bit, money printers dream up the word “transitory!” Hands the note to the administration and all the economic hacks who fall in line and echo every word. They should have all just stood on a stage like the Rockettes, did that Rockette dance and yelled out “transitory” together.

Money printers have an “uh oh” moment. Transitory is not so transitory. The administration’s poll numbers go lower than root canal’s poll numbers as the masses realize falling in line with the money printers is not a good thing.

Amazingly, as wrong as the money printers have been, the masses look to them for the solutions to the problem that the money printers caused. The money printers tell us they have tools. Little do the masses know that the only tools the money printers have is to stop money printing and say it ain’t so…actually raise rates.

Money printers are boxed in like mixed nuts.

Our biggest worry has been what if they are forced to do what they don’t want to do…and that’s stop the money printing and actually raise rates?

Money printers have to know that if they are forced to do the unthinkable, there goes the asset bubbles they created. If they lose the asset bubbles they created, there goes the wealth effect . If they lose the wealth effect, there goes the economy. And by the way, they have created the widest wealth inequality in our history with their money printing.

The real problem is that tapering does nothing. Tapering slowly just continues the massive money printing. If it is the money printing that causes the inflation, inflation will stick and possibly even worsen. If it worsens, the money printers are forced into moving quicker than they want. If they have to move quicker than they want….

YOU GET THE HINT.

The fact is, with the inflation numbers they have created, there should be no money printing right now and rates should be higher. BUT THEY CAN’T. They are boxed in like mixed nuts. They cannot put the #%#@ back into the goose.

But don’t worry. Maybe the bust that always comes out of asset bubbles will cure the inflation problem.

Wash, rinse, repeat.

Feel better now?

We take no joy in this. Nothing personal but we have the worst possible people running the joint. They really do not have a clue and we mean that. The lesson is simple. Playing God with markets WITH UNIMAGINABLE AMOUNTS OF CONJURED UP MONEY BECAUSE OF THE WHIMS OF A FEW SELECT ECONOMIC AND MARKET DICTATORS will EVENTUALLY come back to bite. We know the major indices are just a few percent below the highs but the underlying market is much much worse. And we mean much, much worse. We outlined for you yesterday the massive divergences because of a few names. The major indices had better not join the average stock. We shall be watching.