A leading British stock broker, Alasdair Macleod, posted an article titled “Too Much Liquidity” in Gold Money today, and picked up by Zero Hedge, warning that the “everything bubble” is about to burst. “The fact of the matter is that the world is now awash with excess money, the two greatest inflationists being the Fed and the Bank of England. In the US, the Fed’s $120bn monthly QE continues to goose financial asset values, while the US Government has spent a further trillion into circulation from its general account at the Fed. This tidal wave of money threatened money market funds totalling over $4 trillion with negative rates, thereby `breaking the buck,’ which is why the Fed has increased its outstanding reverse repos to $721bn.”
Macleod warns that “Interest rates will have to increase far earlier than the Fed admits to stop foreigners dumping dollars, not just for commodities which have nearly doubled since March 2020, but for other currencies as well. Welcome to the everything bubble, whipped up by American and British neo-Keynesian policy makers who are now increasingly cornered by their own monetary fallacies.”
He posts a chart labeled “Central Bank balance sheet expansion since 2007.” along with the oft reported fact that the Fed balance sheet rose by nearly 800%, from about $1 trillion to nearly $8 trillion, lists: Bank of England, almost 800%; Bank of Japan, 541%; ECB, 408%, and People’s Bank of China, only 125%.
Michael Burry, made famous by the film “The Big Short” for having figured out that the housing bubble and the MBS bubble were about to blow in 2008, tweeted (as covered in the Daily Sabah) about the ongoing speculation binge, in particular in crypto currencies amd meme-stocks (the stocks driven up by social media sites) will cause investor losses “the size of countries,” adding: “All hype/speculation is doing is drawing in retail before the mother of all crashes.”
