(For those who say I just don’t get it, get this.) Vindication Edition
It’s been quite a while since I did a post using the above title. When the site was running full steam, before I closed it down for this relaunch version, they were a usual feature. They were my version of pointing out when in the end I was proven correct against the myriad of nay-sayers telling me “You don’t know what you’re talking about.” or worse, without me using the “I told you so,” or the “Nah, nah, na na nah, nah” tone many themselves like to opine.
However, unlike prior, this one, I believe, is a bit more important because – it vindicates all my prior assertions in one neat little example. Here’s that assertion…
“With the adulteration and perversion codified into the capital markets by then chairman Ben Bernanke via quantitative easing schemes through various iterations and names (e.g., QE, Operation Twist, et al.) – these markets can not and will not stand on their own two feet. For unless the Fed continues printing money and bailing it out every time when it as so much gets the sniffles – it all collapses. Regardless of what the Fed says. The Fed, along with the markets, have been reduced to the same construct used by the famous infomercial known as The Clapper®. i.e., The Fed either ‘claps on’ and prints or, ‘claps off’ and waits till it’s demanded by circumstances of its own creation to clap once again, turning the printing presses back on, in perpetuity.”
This Wednesday, with the latest Fed proclamation – that assertion can no longer be disputed by anyone with a modicum of integrity. For with the Fed not even have the ability to go more two weeks before needing to return to QE (aka balance sheet expansion) after announcing it was halting its balance sheet reductions – is proof positive. Period. Full stop. Only a fool (as the Fed appears to insinuate everyone is) would believe that not calling $40Billion a month in new purchases something other than QE doesn’t make it so. Even Wall Street is laughing at the wording ruse. Here’s just one example of such snark…
The Fed will also buy $40bn of T-Bills just after stopping QT, but this is not to be seen as QE, nor as having any impact on monetary policy – and QE was a neutral “asset swap”, not a balance sheet expansion that juiced asset prices.
Michael Every of Rabobank via ZH
Again, for this point can’t be made enough…
On December 1st the Federal Reserve halted reducing its balance sheet. On Dec 10th – it declared it was increasing its balance sheet to the tune of $40Billion per month and is open ended on a stop date.
You just can’t make this stuff up.
Now there’s a lot more to say about this, and I will over the coming days and weeks. However, what I want to leave you with is this one overarching premise that many are thinking is now no longer applicable: It may all be too little, too late to stop the cracks that have already appeared from continuing into full blown crisis.
If you think I’m a little off base here, I’ll just leave you with this for the time being. Ready?
How is it that the “markets” are reacting positively (aka gone higher) since the announcement, and yet, Bitcoin™ has done absolutely nothing except vacillate or drift lower?
Here’s my suggestion to the answer…
Because all those that were in the “2025 and beyond” Bitcoin faithful cadre have suddenly had all their profits, if not a lot of principle, wiped into the ether with possible margin call issues still looming on the horizon. Or, as I have coined it on my charts, are sitting squarely in “It’s probably over territory.”
The “markets,” on the other hand, are still able to be funded with residual balances and inflows via 401Ks and other sources, at least at the moment. For the telling/selling narrative that is “AI” is still dominating.
Till it isn’t.
Both of the following two charts below are updates of my prior, taken at ~1:00pm ET Thursday. Just to show my point. To wit:
I’ll only add the following…
Don’t for a moment think what has since transpired in Bitcoin can’t happen to the overall “markets.” On the contrary – Bitcoin is, quite possibly, your first true “canary in a coalmine” indication of just how broken everything really is. As matter of fact, I said as much on October 7th when no one else even considered the possibility.
And here we are.
© 2025 Mark St. Cyr
Note: This commentary is for education purposes only and is not to be construed as trading or investing advice of any sort. These commentaries/opinions are for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.