Party Like It’s 1999?

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Zero Hedge: Greenspan couldn’t stop it until he cut rates by 500bp… Bernanke couldn’t stop it until he cut rates by over 500bp… Powell barely has 200 bp to play with…

Has the Fed been forced into the type of asset price inflation that actually will be the cause of the next recession? And may that recession be unavoidable despite everybody now ringing the all clear on recession risk? Perhaps the ultimate contrarian question to ask, but I assure you it’s not just a theorem, it’s actually based on historical precedence and that precedence was the year 1999.

2019 was obviously about avoiding the global recession and central banks went berserk trying to prevent it with the renewed liquidity injections. System failure. In the real word system failure has consequences and ironically it may well be the central banks who have planted the seeds of destruction. Read More…

Opinion: Central Banker Jay Powell threatened to raise interest rates 3-4 times in October 2018. The global market cratered. By January 2019, the Fed was forced to capitulate and lower rates. Last week the Fed announced that it will not lower rates again until 2021 (at least) and instead is pouring money into banks that will total $950 billion (not to be called QE), by January 2020.

What then?

Wired Magazine in 1999:

“THE STOCK MARKET just keeps on climbing and Federal Reserve boss Alan Greenspan is making a massive amount money available for the economyGreenspan has engineered the biggest expansion of money supply in the Fed’s history in the weeks leading up to the end of the year. The Fed’s move has been explosive on Wall Street because a free flowing money faucet at the Fed is the stuff that makes bull markets get fatter.

Then there are two S&P charts:

1999:

2019:

A recession began in March 2000.

What has been will be again,
    what has been done will be done again;
    there is nothing new under the sun.” Ecclesiastes 1:9