The Four Trillion $ Line

Although the aforementioned headline could be used for some drug themed movie, it goes without saying, there’s another line that has just as much “drug induced” repercussions. To wit:

(Chart Source)

The above is the S&P 500™ using a daily time frame. As you can see, that diagonal line is what I’m referring to as the “Four $Trillion.” line. The reason why is as simple as this…

That is how much in pixie-dust money the Federal Reserve has pushed into these “markets” since March of 2020 to create it. Again, a doubling of it balance sheet “up the nose” for Wall Street consumption in less than 24 months – and its credibility for predictive monetary policy and implementation – into the dumpster where it remains.

Just don’t remind the mainstream media’s financial/business press of this – they don’t want to hear it, let alone, discuss it. Shhhhhhhh… mums the word. OK?

In other words: What you see before you is nothing more than a monetary induced drug binge that would make a drug lord envious.

All of the above, let me repeat this for emphasis, all of the above, is nothing more than a complete and utter sham of a con job. There is nothing fundamentally real about it. i.e., there is no economy or underlying business activity to support it. Zip – Zero – Nada.

All the above is nothing more than a representation of just how far narrative can push crazy talk. Period. For, the moment (which is why con jobs are called such and fail) there is a loss of confidence, any confidence, in the narrative that the Federal Reserve is in control?

It. Is. Over. And may be over with absolutely stunning effect.

Just to bring back to one’s memory for those that may have forgotten…

That plunge down on the left hand side, beginning with a small box above the “Break Even 2020” line, is where the Fed began to lose control (aka narrative) and the “markets” began to plunge.

This was also the period when all the talking heads and buzzer banging clowns said it was just a temporary thing and to “Buy, Buy, Buy!” And we plunged even further and faster as I wrote we would back then.

That was before Covid, not after. Less than about one third of that plunge (the bottom third) is related to Covid, for it was still a relatively unknown quantity at that period of time.

As you can clearly see, that line has been all but impenetrable except for a recent break, which just so happened was Fed induced via signalling a possible rate hike sooner than later, and, was only reversed after what appeared to be some emergency get your mind right discussion with the President, Secretary and Mr. Powell.

Since that day, Mr. Powell, has done nothing but reassure anyone and everyone to not believe their lying eyes when viewing the latest “Dot Plot” and believe him that everything is fine and inflation concerns are completely unfounded because “He’s got this!”

All I’ll say to that is…

He’d better, because, I have a very sneaking suspicion they’re going to test that premise.

As always, we shall see.

© 2021 Mark St.Cyr

Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.