by Finian Cunningham, Daily Reckoning:
The Great Zombie War is proceeding as expected…
Cannons to the left. Cannons to the right. And a fool on every corner.
It will become more and more dangerous, we predict. Then in a fiery ball of hyperinflation and bombastic imbecility, it will all be over…
If we’re lucky.
Then we will return to sanity — older, wiser…and much poorer.
Nuts to lend at zero
But that won’t happen in a day. Or a week. Or even a year.
Yesterday, the stock market bounce that began at the end of last week reversed course.
The Dow closed down 114 points. This left the US stock market with its worst monthly performance in five years.
This alone is meaningless. Markets go up and down. Nothing new there.
But this is a very special market. The very special policies of the Fed, and other major global central banks, have been made especially dangerous.
Whoever heard of lending money for zero interest? Are they mad? Does capital have no value at all? Is there no longer any virtue in saving money?
Yes, it is nuts to lend at zero. But the Fed has been keeping its key lending rate near the zero bound for the past 80 months.
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