The blow-off orgy in the stock markets is supposedly America’s consolation prize for what many regard as the electoral bad acid trip of the Trump presidency. Sorry to tell you, it’s just another hallucination, something you’re going to have to come down from. Happy landings!
While the markets have roared parabolically up, in Technicolor, with sugar-on-top, that ole rascal, Reality, is working some hoodoo in the other rings of this psychedelic circus: namely the dollar and the bond market. The idiots on NPR’s Marketplace and the Cable TV financial shows haven’t noticed the dollar tanking the past several months or the interest rates creeping up in the bond markets. Well, isn’t that the point of living as if anything goes and nothing matters, the mantra of the age?
Alas , things are connected and consequences await. It would be rich if a flash crash ripped the Dow, S & P, and the Nasdaq to shreds twenty minutes after the Golden Golem of Greatness finished schooling the weenies of Davos on the bigly wonderfulness of his year in office. In fact, it would be a crowning comic moment in human history. I can imagine Trump surrounded by the fawning Beta Boys of Banking as the news comes in. Poof! Suddenly, he is alone in the antechamber backstage, nothing left of his admirers but the lingering scent of aftershave. The world has changed. The dream is over. In the mirror he sees something that looks dimly like Herbert Hoover in a polka-dot clown suit, with funny orange wig….
A financial smash-up is really the only thing that will break the awful spell this country is in: the belief that everyday life can go on when nothing really adds up. It seems to me that the moment is close at hand. Treasury Secretary Mnuchin told the Davos crowd that the US has “a weak dollar” policy.
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