Forever FED? Emergency Bailout Now The Norm

Is the Fed losing its excuse to pump in $120 billion in QE per month?

Vaccine Immunity: All profit & no liability for big drug companies

Bond ETFs - Bank of International Settlements concerned

Forever FED? Emergency Bailout Now The Norm

August 25, 2021

“Politicians never let a crisis go to waste, whether it’s real or not real, the crises we’ve seen over a 50-year period, you’d say opportunity is opportunity. If you never imagined modern monetary theory gaining traction, you just don’t know how that gets done because it’s an absurd idea, there is an existential threat which changes the character of the conversation. It changes the debate on the issue of financial conservatism versus fiscal largesse.” — David McAlvany

Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. 

I looked up today before we started, because I had been talking to you about the forever virus. You brought that up that in Foreign Affairs, they had an article that, hey, this virus isn’t going to go away. There’s too many opportunities. They didn’t say that part. But now we’re looking at the forever vaccine because of the Israel studies. We had the forever war in the Middle East that just suddenly ended. I think there was an awful lot of dependency on the forever war. 

With all these forevers, including the forever Fed intervention, emergency intervention, now we’re on the 12th or 13th year of the emergency intervention for the Fed. I looked up songs— I was thinking of some songs, Strawberry Fields Forever—strawberry fields forever. Randy Travis, one of my favorites—forever and ever amen. Now I’m not quite the singer that Randy is and Kiss had a song called Forever. Bob Dylan had a song called—

David: Can you sing that song by Kiss?

Kevin: That one I can’t, I can’t. Bob Dylan, Forever Young. We do have some forevers out there, but the forever virus, the forever vaccine, the forever war, the forever Fed intervention. I think we ought to talk about this because what we saw last week, Dave, about a week and a half ago was what happens when dependency on forever gets taken away. Let’s talk about that today if we could.

David: I got to read a little bit of Joseph Tainter’s The Collapse of Complex Societies and the things that you think are forever, even empires.

Kevin: He was a great guest. He was an interesting guy.

David: That is one of the archives that could be worth going back to, if you’re not going to take the time to order the book and read it. It is, I think, a very important read. But the argument is that there’s complexity, and the more complexity there is, the higher the cost to maintain a system, where ultimately the economics just don’t work. The more complex a society gets, the higher cost to maintain, and ultimately people either move on or it collapses.

Kevin: Well, let’s talk about $120 billion monthly from the forever Fed intervention. Now, they can’t blame that on employment anymore, right? Because employment, the numbers are getting good enough, actually, where the Fed is going to have to come up with another reason to give us that 120 billion forever feed.

David: In July the monthly employment rate fell to 5.4%, and we’ve got job vacancies sitting right at around 10 million. There’s a Harvard economist, Jason Furman, the Financial Times was quoting him, and he said, “I have yet to find a blemish in this job’s report. I’ve never seen such a wonderful set of economic data.”

Kevin: And the Fed is going “shut up, shut up.”

David: This is a guy who teaches the dismal science, and he’s almost enthusiastic. “I’ve never seen such a wonderful set of economic data.” He sounds like an evangelist. The key here is that the Fed has lost justification for maintaining that $120 billion in monthly purchases. So, yes, COVID cases have risen. Yes,