THE 800 POUND GORILLA

Can the 800 pound gorilla in the room  defy nature/gravity and walk the tightrope into solid growth and recovery? Stay tuned for the Flying Bernankies and their death defying act. Having navigated through a global collapse in 2008 with a massive printing surge of tens of trillions of dollar printing and flooding bank reserves around the globe with greenback funny money, the gorilla in the room prepares for its next act….and this one is a doozy. Can a global consumer riddled with debt and collapsing individual income and job availability stage a solid recovery in the face of structural reforms that were never addressed by the Western countries involved? 

So here we are with the ultimate conundrum. How do we load a consumer that is flat A$$ broke with even more debt to propel a flagging GDP? AND if we were able to mount some type of growth then how in God’s green earth would we be able to maintain the low interest rates to maintain the illusion that we can carry the insurmountable debt that we’ve created to arrive at this point? Perhaps the tight rope is around our necks instead of under Ben’s feet.

So, in fact, instead of a recovery we’ve actually put the rope much higher for the Fed to cross AND much tighter now around our necks……probably not a good crossroads to have reached. Maybe we can maintain the illusion that we’re “almost there”….and “just don’t look down. Sheep like to follow and in this case I see nothing to change that fact of nature. THEY will follow…..and they refuse to look down like all good sheep. Warnings abounded in 2007 while the rope was raised and the sheep kept following without breaking rank. “THIS TIME IS DIFFERENT”.  ”PIGS DO FLY”. Enjoy the next act….just don’t look down.