Renewable Revolution

FRIDAY, JAN 28, 2022 - 12:25 PM

Authored by Charles Hugh Smith via OfTwoMinds blog


The equity, real estate and bond markets all rode the coattails of the Fed's ZIRP and easy-money liqudiity tsunami for the past 13 years. As those subside, what's left to drive assets higher?

SNIPPET:


The Federal Reserve and U.S. Treasury have institutionalized moral hazard, the disconnect of risk and consequence, for America's financial elite: rather than force those who gambled and lost to absorb the losses in 2008-09, the Fed and Treasury bailed out the too big to fail, too big to jail financial elite, establishing an unspoken policy of encouraging the wealthiest individuals and enterprises to borrow and gamble freely, knowing they could keep any winnings  😈 (and pay low or no taxes on the gains) and transfer any losses to the Fed and/or taxpayers. 


7. This institutionalization of moral hazard combined with zero interest rate policy (ZIRP) and an open spigot of liquidity has driven wealth and income inequality to extremes that are economically, politically and socially destabilizing. Insider trading in the Fed and Congress has finally leached out into the public sphere, and the cozy enrichment of the already super-wealthy has now reached 💣 extremes that invite destabilizing 💥 blowback.

Full article:
https://www.zerohedge.com/markets/no-wonder-market-skittish