Now, ominous 2013 election fortunes might taper (no pun intended) expected Tea Party resistance to Queen Confetti becoming the next Fed chair, yet the threat of crossing a hyperinflationary threshold, the likes of which Yellen elevates, raises the specter that core debt securities (U.S. Treasuries) propping up a hopelessly insolvent trans-Atlantic banking system will be increasingly spurned. Currently being telegraphed in sinking debt markets this week just might be what considerable trouble awaits Queen Confetti early next year once Capo Confetti is put out to pasture. Not to read too much into what likely is Emerging Market selling of anything not nailed down to support currencies being sacrificed in the cause of propping up a U.S. dollar whose Fed sponsored debasing is a frightful bane—a sure harbinger of Wiemar 1923. Yet with so many vulnerabilities defying capacities of lenders of last resort to contain their policy's inevitably devastating impact, garbage at the bottom of the capital structure still continues to enjoy a rather sanguine backdrop.
Granted, with present anticipation the Wiemar Fed's policy will be taken up a notch once Queen Confetti ascends to the throne, the illusion of "value" at the bottom of the capital structure sustains its allure only to suckers who fail to consider the one critical distinction separating the present moment from post-WWI Germany: the German mark was not a global reserve currency, whereas the U.S. dollar today is. There's far greater risk, then, a currency crisis will send dollar-denominated assets into a tailspin no matter how much the Fed hyperinflates its securities purchases through quantitative easing, and this all the more if today's lords of zero due diligence express willingness to monetize equities. Truth is if the Fed ever signals this, then even today's hopelessly brain dead will have no choice but realize the trans-Atlantic banking system is gone. Then, every morally decrepit monetarist on the planet will be waxing nostalgic for the "good ol' days" under Volcker.
MACD's negative signal line crossover (bottom panel) suggests the garbage levitation trade is increasingly challenged. Yet having only trapped weak hands holding this trash, and forced to call a delicacy the cover of maggots infesting it—these made succulent in the promise of more Fed sweetener expected to mask a collapsing physical economy—some little boy sure to shriek the truth and expose a naked emperor could bring Yellen to suffer a "heart attack" even before she is sworn in. Of course, this would be "someone" who this past summer was demanding the forced retirement of Capo Confetti, that sanity be returned to the Fed. Instead, we have an even more reckless exporter of inflation being elevated.
It is difficult to imagine there are no vested interests, already seeing a naked emperor's waning geo-political influence, who will turn in revulsion reacting to the elevation of a Queen Confetti, perceiving a Fed policy plainly aiming to extend a desperate ruse. We might keep watch here for a setup venturing world war, too, peeling our eyes for some modern-day manifestation of cave dwelling, monkey bar climbing, dog gassing patsies to whom blame might be laid for pulling the plug and cutting the cord on today's hopeless banking system. If nothing else, Confetti clone Yellen might be here to help make the forgotten man's upcoming, unparalleled sacrifice an easier sell, assuming she makes it through the Senate and lives to see the new year.
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