In this week’s Off The Cuff podcast, Chris and Wolf Richter discuss:
- The danger of asset bubbles
- The Fed’s serial addiction to blowing them
- Tesla and the shale industry as case studies
- Covid-19s legacy on society
Everyone loves a bubble until it bursts. And we now live in age of multiple bubbles, with the Federal Reserve at the center, blowing each with vigor.
This inevitably will end painfully, as every prior bubble era has. But along the way, the more massive the distortions become, the greater the injustice between rich and poor becomes, and the more damage will ultimately follow.
And, slowly but surely, more and more people are waking up to the reality that the Fed’s serial addiction to blowing bubbles is actually the cause of many of today’s problems, not the cure as it would have us believe.
There aren’t a lot of people that don’t like bubbles. It is just when they blow up, everybody comes around wailing. That’s really the problem. They do blow up, and the damage is huge when they do — like we saw during the Great Financial Crisis.
Now we’ve had another bubble blow up. The Fed just spent $3 trillion trying to reflate that bubble. But now we have 28 million people now still on unemployment compensation. The damage is just huge when these things blow up.
I do not know that the Fed can figure out how to ever get out of this.
by vtgothic