t. man hatter
Scams get detected in many ways.
One of the simplest though perhaps the least scientific is when everyone jumps on board and you start seeing articles and new releases about it everywhere. People at cocktail parties brook the subject to strangers and its shows up on your favorite local six o'clock news and morning talk shows.
In the stock market such conditions usually get labeled as bubbles. When its the not-your-friend bureaucrats at the central bank pulling the scam you need to pay attention.
The classic definition of inflation is too much money chasing too few goods. But truth is there are many ways to define inflation, asset inflation, consumer prices, wage inflation and so on. They don't all have to occur at the same time to have inflation. One could easily make the case with the explosion of questionable IPOs coming to market in this bull run is being fueled by too much money chasing too few IPOs.
So the solution is simple, keep money easy and plentiful and just bring more IPOs to market. It's the fulfillment of P.T. Barnum's adage: "There's a sucker born every minute." Regulations are not about making things better. They're about outlawing the existence of suckers. But until we are all robots and drones this flies in the face of the human genetic code.
During the subprime real estate mess you had too much easy money chasing too few structures. Everyone according to the government could own one or, for that matter, two with minimal out-of-pocket costs or risks. It was a way supposedly to close the hated income gap. A basic problem here is who gets to define inflation.
So far it's been the Fed with their put-this-in-and-take-that-out indicators within their vodoo econometric models. And their get-away drivers for the most part are MSM. So when trouble strikes, the Fed, following their archaic Keynesian up-bringing, print money to stimulate consumer spending.
It's akin to just repainting the house without repairing any of the underlying structural defects. Go back and look at all the screaming among the EU peripherals a couple years ago at the mention of austerity. The austerity-minded Germans took enough heat for it that they won't need if they so choose any Russian heating oil this winter.
Politicians and bureaucrats cause it and then as is their style want to opt out of any blame. In fact, their history, as always, is to blame someone else. It's pretty difficult to find a more convenient group than the wealthy or successful.
Easy money doesn't exist in a vacuum; it goes somewhere. And that's to those who know how to multiply it best, in this case the now vilified, much maligned wealthy set. Are they doing anything wrong when the Fed showers them with this easy money, it's there for everyone?
Some reformers, usually dunderhead politicians, scream about loopholes. Loopholes are not illegal. The Fed, paneled as it is with all these academic economic geniuses, surely understands before hand that much of this easy money will find its way to assets. In fact, one could easily argue that's exactly what the Fed wants with it famous "wealth effect" maneuvers.
When you create bubbles which central bankers are noted for and those bubbles burst the folks you frighten the most are the have nots, not the haves. Again there is nothing sinister or illegal here. One of the suspected bubbles much talked about today are college educational loans. More and more people according to government mandates are presumably enjoying the right to get informed, educated.
Educated people from what we've seen have a history of working their way into becoming for the most part haves. Either the statistics are correct or they're bogus. If they're bogus then that too says something about the whole costly educational system.Why have it, especially at it current bloated prices?
Much of the criticism of the wealthy is underhanded, as in baseness and dishonest. Are there any dishonest Congress persons? The history of dishonesty and dissembling in Congress is long and lush. Anybody in sports dishonest? Anyone in business or the church dishonest? Any dishonest people among the poor, the lazy or the infirm?
One of the implied criticisms against the wealthy is because they are wealthy they can do so much more damage. But history tells a different lesson. It's really hard to do more damage than a well-intentioned, benighted politician or bureaucrat. In fact, well-intentioned is the most dangerous hyphenated word in the English language.
So keep your eye on the current scam. It has all the earmarks of the well-intended, benighted.
That's our view. We hope you know yours.
