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Can extremes become too extreme to continue higher? We’re about to find out. Is anyone willing to call the top of the Everything bubble? The short answer is no. Anyone earning money managing other people’s money cannot afford to be wrong, and so everyone in the herd prevaricates on timing.

Beneath the illusory stability of rising GDP, the extremes of debt, leverage, stimulus and speculative frenzy required to keep the ‘phantom wealth bubble’ from imploding are all rising parabolically. Imagine being at a party celebrating the vast wealth generated in the last ten months in stocks, cryptocurrencies, real estate and just about every other asset class.

The incentives must change from “waste is growth” to hyper-efficiency, conservation, right to repair and manufactured objects engineered to last a generation or longer and be recyclable at scale. Humans like novelty but don’t like change. It’s easy to confuse the two.

No nation can produce less of lesser quality, and squander more on infinitely greedy and corrupt elites, all funded by issuing trillions of new units of currency, and imagine that this asymmetry will never have consequences. As I have often noted, historian Michael Grant identified profound political disunity in the ruling class as a key cause of the dissolution of the Roman Empire.

Necessity is a magnet, and perhaps as what’s essential in our lives changes, social capital will start sprouting, even in the most unlikely places. “Desert” has become a favored metaphor: food deserts describe neighborhoods with few places to buy fresh fruits and vegetables, democracy deserts describe political regions rigged by gerrymandering, and so on.

One phrase describes the Fed’s pillaging of the nation to benefit the few at the expense of the many: abuse of power. To confess that the fate of the entire global economy now rests on the mumblings of a fossilized Politburo fanatically devoted to making the rich richer is to 1) state the obvious and 2) admit the extreme fragility of the global financial system.

The post-bubble-crash phase is already being prepared: ‘no one could have seen this coming’–except anyone who paid attention to anything other than self-interested shills. It’s really pretty simple to identify a speculative bubble of epic proportions in stocks: if Wall Street says it’s not a bubble, it’s a bubble.

A drought-stricken forest choked with dry brush and deadfall is an apt analogy. While a stock market crash that stairsteps lower for months or years is generally about as welcome as a trip to the guillotine in Revolutionary France, there is some major upside to a crash.

Is that the scent of smoke? What’s that red glare? Must be nothing. Why are the wheels coming off the American Project?Afghanistan is front and center in the news flow for obvious reasons, but since I have no expertise on that nation or America’s role there, I am stipulating these are general comments from a systemic perspective.

Generations of punters have learned the hard way that their unwary greed is the tool the ‘Smart Money’ uses to separate them from their cash and capital. The game is as old as the stock market: the Smart Money recognizes the top is in, and in order to sell all their shares, they need to recruit bagholders to buy their shares and hold them all the way down.

Global supply chain logjams and global credit/financial crises aren’t bugs, they’re intrinsic features of Neoliberalism’s fully financialized global economy. To understand why the global economy is unraveling, we have to look past the headlines to the primary dynamic of globalization: Neoliberalism, the ideological orthodoxy which holds that introducing market dynamics to sectors that were closed to global markets generates prosperity for all.

Demand isn’t the problem, supply is the problem, and it can’t be resolved by printing more currency or lowering interest rates or cranking up inflation. To the degree that we inhabit an economic order dominated by Keynes and “demand,” then any discussion of inflation has to circle round to Keynes and his magic solution to all economic ills: “demand”, otherwise known as money burning a hole in your pocket.

So sorry, America, but your central bank is certifiably insane, and it’s not going to magically work out. History definitively shows that speculative bubbles always pop–always. Every speculative bubble mania, regardless of its supposed uniqueness–“it’s different this time”–pops.

August 9, 2021 Viewed as a complex non-linear system, the pandemic varinants can only be controlled by drastically pruning the physical connections between disparate global groups, which means effectively ending the unrestricted flow of individuals around the planet.

But once this last pool of wealth–America’s middle class– has been siphoned dry, then who’s left to stripmine and exploit?Neoliberalism loves markets, because markets enable the wealthy to own everything that produces income and capital gains.

This wholesale transfer of risk from elites to the workers is finally becoming consequential as wealth / income / security inequality is reaching extremes that are destabilizing society and the economy. One of the most consequential financial trends of the past 50 years has been ignored to the point of invisibility.

The global economy may have finally run up against hard limits of “infinite substitution” and “infinite expansion” funded by central-bank free money. We are in an interesting, Hall of Mirrors moment: prices are rising, yet we’re assured by the Federal Reserve that this inflation is “transitory,” and other voices are insisting the primary forces of the economy (globalization, debt and automation) are all profoundly deflationary, meaning prices of everything will eventually plummet as supply will outstrip demand.

The truth is America has lost its way if commoners pay a rate of 40% but its billionaires pay next to nothing. As with everything else in polarized America, billionaires proclaiming space tourism is the next for humanity neatly divides opinion into two camps: those who laud the initiative, hard work and innovations of the billionaires as examples of the American Can-Do Dream, and those who wished the billionaire space tourists had taken a one-way flight to a distant orbit of blissful silence.

The ideal bagholder is one who adds more on every downturn (buy the dip) and who refuses to sell (diamond hands), holding on for the inevitable Fed-fueled rally to new highs. Old hands on Wall Street have been wary of being bearish for one reason, and no, it’s not the Federal Reserve: the old hands have been waiting for retail–the individual investor– to go all-in stocks.