Stocks Plunge, Central Banks Pump.

24 minutes

Its clear that the spigots are wide open, and nothing is going to stop any of these bankers from pumping cash into the system.

It may seem like a noble enough effort, until you realize that this newly created debt falls squarely on the shoulders of you and I. The common tax payer, who is expected to stand behind the current largess.

The unfortunately reality of all this is that again for the second time including the 2008 Great Recession, we will emerge from this major bear market having accumulated more debt, not less. Before 2008 in all the preceding financial crashes, debt was destroyed. As debtors were allowed to fail. And we emerged from the various crisis with little debt. And able to move on to a new business cycle almost debt free.

Since 2008, however, the Fed has answered every crisis, with a liquidity pump. Meaning that we exit every crisis owing ever more. Debt is no longer destroyed, it is multiplied.

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Start listening to The Big D: Deflation.
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