Economy & Business, Politics

Biden Economy Careens Toward an Inflation-Induced Market Crash

And yet, without a sharp slowdown in the economy, one catalyzed by sharply tighter financial conditions and multiple rate hikes (yesterday JPMorgan joined BofA in predicting seven rate hikes for 2022), the runaway inflation crisis that has crushed Biden’s approval rating will only get worse until we finally reach a breaking point where the Fed will lose all control over inflation expectations, sparking what may become hyperinflation, currency debasement and collapse (as BofA warned last week) and the end of the Fed itself which will no longer be relevant in a world where a 2% inflation target is no longer applicable.

That’s why we suggested that while the Fed does want a mild recession to cool down the economy, the Fed can ill afford a full-blown market crash, especially since virtually everyone in the market expects Powell to step in and rescue risk assets once the strike price of the Fed’s downward adjusted Put (as the Fed’s minutes noted yesterday) is hit, somewhere around S&P 3,800-4,000…

It will be up to Powell at that point to decide if he will risk not just the Fed’s legacy and the western way of life, or scramble to appease the senile, 79-year old president who is now clutching at straws to preserve even a shred of his legacy… even if means destroying tens of trillions of (fake) wealth in the process. Read more…

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