by Gary Christianson, Miles Franklin:

Breaking news: The Wall Street casino created another all-time high for the S&P 500 Index during the week ending February 14. Regular new highs reassure people, but others fear they are symptoms of another Fed inspired bubble.

The “pickle” description is explained below. Stay tuned.

The Federal Reserve is monetizing bonds—directly funding the federal deficit because congress and the administration spend more than their revenues. The coming recession will increase the shortfall, expand debt and force more monetization. Stagflation anyone?

Corporations, individuals and governments can ill afford higher interest rates. Expect the Fed to monetize at low interest rates to fund government expenditures. QE4ever is happening because it must.

What other gambles exist in the Wall Street casino?

• The Fed bets it can monetize via QE4ever and create minimal consumer price inflation. If not, the BLS will massage statistics.

• The Fed bets it can increase its balance sheet, aid hedge funds, feed Wall Street banks, please President Trump, buy off congress, and keep its position of power and influence. Based on a century of evidence, they can, for a while longer.

• The Fed bets it can levitate the stock market and boost the economy long enough to reelect President Trump in November 2020.

• The Fed “prints” currency units, and those currency units buy congresspersons, presidents, media corporations, the military-industrial-security complex and everyone important. The Fed is betting it will last nearly forever.

• The Fed bets they can continue their “take from the poor and give to the rich” program of controlled dollar devaluation for many more years.

• The Fed bets that “Federal Reserve Notes” are better than gold because they are “the only game in town,” even though gold retains its value and dollars buy less every year, as planned.

• The Fed bets the existence of Fort Knox gold is irrelevant. Total value, at current prices, is less than $300 billion, and the Fed created more than $300 billion from thin air in the past several months.

• The Fed bets it can plan to normalize their balance sheet, even though normalization would create a depression. Plans are not facts.

• The Fed bets it can avoid deflation and manufacture enough, but not too much, consumer price inflation. Doubtful.

IN SHORT, THE FED IS A GAMBLER.

The politicians and economists at the Fed are gambling with the health of the economy, purchasing power of the dollar, individual savings, Fed credibility, pension funding, and retirements. The gamble will work poorly for most people, but the Fed will protect the political and financial elite.

WHAT DO WE KNOW ABOUT GAMBLERS?

A few thrive. Most lose money. Some lose jobs, savings, health, marriages, and their lives. Businesses built Las Vegas casinos from profits generated by customer losses. Many people dumped a huge number of dollars to create and maintain that monument to wishful thinking and hopium.

Las Vegas sounds like the Federal Reserve—a monument to wishful thinking, hopium, greed, and lobbying power.

GAMBLERS ANONYMOUS or GA helps compulsive gamblers. A few clichés from GA:

• If nothing changes, nothing changes. [If the Fed continues “printing,” the devaluation consequences of printing will persist.]

• Once a cucumber becomes a pickle, it can never be a cucumber again. [The Fed has passed the point of no return; it is a pickle.]

• If a gambler holds a shovel, he will dig himself a deeper hole. If he puts the shovel down, it’s possible to climb out. [The Fed will not drop their shovel. Their “hole” will get bigger.]

There are two kinds of gamblers. A “cucumber” gambles and quits. A “pickle” gambles, loses too much, and moves to Las Vegas to dig a deeper hole and gamble more. A pickle’s life usually ends badly.

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