Sunday, December 1, 2019

We've Seen This Explosion Before

When this central bank Jedi mind trick for weak minded fools spontaneously explodes at all time highs, I'm going to take a break from describing reality to a non-existent audience. In the meantime, archaeologists are going to want to know, "what happened?"...

The supposed benefit of living in a Japanified Idiocracy run by aging dunces free-basing narco-pharma, is that you get to watch the same movies over and over again. Each time with an audience "surprised" by the ending. Which is why Netflix has decided they no longer need new content...

The subject of this post is RECORD NEW LIES:

For some reason I'm not enjoying being locked in a central bank managed "safe space" run by and for arrogant geezers evincing the combined intelligence of a fucking brick. Now fully conflating inter-generational theft as "GDP". I'm just not big on circle jerks. I've never been a joiner.

Which is why my blog stats have been quite flat lately, which the lonely reader can take as a harbinger for how many people you know are about to shit a massive brick. Because when this groupthink bubble in self-medicated delusion explodes, the panic will be unprecedented. And not a few geezers will be "triggered" for the last time.

Imagine a scenario in which the real economy no longer matters because central banks have discovered a way to fabricate simulated prosperity out of thin air. All they have to do is meet every six weeks and decide how much money to print. 

That is the world we now live in:

The economy has been weakening this entire year, while stocks went higher:

Why is that a problem?

Good question. Albeit one that would have seemed asinine at any other time in U.S. history, going back some ~243 years.

I asked myself, have we ever seen this magnitude of disconnect before - more specifically, have we ever seen the "reflation" trade rally during deflation.

And of course we have seen this before, in 2014/2015.

Here we see that in 2014, treasury bond yields crashed as they have been this year, until recently. Then, bond yields staged a three wave Ponzi reflation rally. Meaning, gamblers rotated into the reflation trade assuming reflation would follow.

Shockingly, what followed was not reflation, it was smash crash 2015:

Now we know why new highs are not confirming this rally.

And we know how this movie ends.