The Fed Is Playing With Fire

We need to think about this cycle entirely differently, because it is profoundly different. Call this ongoing economic crash the “controlled burn regime.” 

For the first time, save a brief period in 2018, the Fed is actually starting fires in a controlled burn rather than desperately putting them out. 

The Fed finds itself tightening into a deep market correction and the start of an economic contraction, in the hopes of alleviating the overgrown, distorted ecosystem and the resulting inflation that it, of course, created.

Any discussion of what’s happening today must first acknowledge this extraordinarily unique regime.

That’s why this time seems so different.

If Fed keep it going, we won’t know that the benign regime has exploded out of control until it’s too late. 

Mark Spitznagel Barrons 18 October 2022 

https://www.marketwatch.com/articles/federal-reserve-economics-51666037616

If this credit bubble ever pops it’s going to be the most catastrophic market failure that anyone has ever read about 

Bloomberg 3 June 2022

https://englundmacro.blogspot.com/2022/06/if-this-credit-bubble-ever-pops.html