All central banks can do is create fiat debt instruments. With interest rates rising, they are pm a government debt hamster wheel, continuously creating fiat debt instruments to buy an ever-expanding supply of government debt. It can’t last. From Tom Luongo at tomluongo.me:
I don’t know what’s more ludicrous at this point, the amount of central bank intervention or the whining from the markets that there isn’t enough.
We’re headed for the mother of all financial crises and from my chair I can’t for the life of me understand how so many smart market analysts can’t see the way it’s being engineered right in front of their eyes.
Despite the headlines and the ocean of money beginning to flood the landscape from the Fed and the Treasury dept. the Fed wasn’t “uber-dovish” on Wednesday. If anything, FOMC Chair Jerome Powell didn’t give the markets what it wanted at all.
All the Fed did was say we’re going to keep doing what isn’t working until 2023 despite what the bond market thinks we should do. Oh, and we’ll make potential credit lines to the banks deeper.
The response was typical. Everything was golden. Taco Tuesday’s are back on the menu and the Fed has our backs.
Because for a brief few hours the algorithms scanned the headlines and reacted accordingly. The weak dollar is here.