Loading ...Bubbles tend to rise and drop in rough symmetry, meaning they tend to retrace the entire bubble, though the descent is often much faster than the ascent.
. The belief here is that all the dollars created out of thin air by the Fed will flow into stocks. But there is no actual causal mechanism in this belief; the Fed can create dollars out of thin air but they don’t have to flow into the stock market; they can go elsewhere. They only flow into stocks because the financiers, banks and other parasites and predators are counting on greater fools to pay ever higher prices for stocks based on their erroneous faith that the Fed’s new money magically goes straight into stocks.
The greatest fairy tale of them all is the Fed has our backOnce the pool of greater fools dries up, stocks crash regardless of what the Fed does or bleats, up to the point that the Fed is given the legal go-ahead to buy stocks directly. That’s when the inflation everyone anticipates will begin. But inflation is just as unruly a beast as an asset bubble, and control is never quite as complete as the Fed claims.
First the deflationary deluge, then the tsunami of inflation. Both destroy the wealth of believers in fairy tales.
https://www.zerohedge.com/markets/first-deflationary-deluge-assets-crashing-then-tsunami-inflation