[dkjaudyeqooe]

The Fed is precipitating the next recession (maybe) and also created the crypto bubble along with the stock market bubble, the venture capital bubble and various other asset inflations due to its easy/cheap money policy.

What's happened now is that the Fed has suddenly withdrawn its cheap and easy money and these people are having a wile-e-coyote moment. Currently they're suspended in mid air with nothing below.

Crypto isn't to blame, neither is the Fed (maybe), it's just the hangover from covid and the war in Ukraine.

[ChuckNorris89]

> it's just the hangover from covid and the war in Ukraine*

No way. COVID and the war are just the straws that broke the camel's back, they just helped bring down this house of cards that was the bubble economy the Fed created purely out of cheap money I'm the last decade, and overinflated in the last 2 years.

COVID and the supply chain disruptions it caused, was the perfect wake-up call to parachute the economy back down to earth, but instead they just kept the money printer running at full speed until the war came.

How is COVID and the war to blame that the Fed quadroupled the money supply in just 2 years? How was that house of cards ever going to be sustainable?

Of course the war brought it down. And if the war wouldn't have happened, something else would have brought it down instead. It was just not sustainable.

[hakfoo]

I blame the death of the defined-benefit pension.

Basically, Wall Street created a "You're locked in here with me" scenario for the entire American public. Everyone has to throw their money at some speculative asset category, typically stocks, to have a meaningful chance of beating inflation. (Yeah, real estate, fine art, and Yu-gi-oh cards exist, but they're far less fungible and liquid at the scales required)

This creates a political feedback loop: the S&P 500 must keep going up in perpetuity because we're all afraid of being 82 years old and in failing health but having to still flip burgers to afford our medication. Ergo, policies like super-low interest rates that make alternatives like bonds ever less compelling and focus ever more interest in an asset bubble.

TBH, I feel like there's a real opportunity to ask "why are we investing."

For people forced into the market for things like retirement and educational savings, maybe we need some sort of contribution-based scheme, rather than a market-price-based one. Sign up now, contribute an agreed-upon sum for N years, and you get your retirement condo/kid's tuition at Harvard prepaid in 2044. Make the institutions-- the ones with teams of actuaries on staff and the financial backstop to handle it-- eat the inflation risk instead of the individual with a net worth of $650 on a good day.

That sort of program could remove a lot of the "mere mortals who stand to lose everything" from the market. The political benefit is then it returns Wall Street to being a casino for the rich and distasteful, and makes it much easier to propose regulation or managed-growth policies. When not everyone is chained to the market through a 401(k), the threats of a market tank don't bite quite as hard.