Wrap

Risk off, although equities seem to bounce back after hours. Dollar and bonds seem to be rallying: maybe things have been overdone. Precious metals up a bit, but I’m getting nervous about all inflation trades, given that it’s not clear if the Fed can keep creating money in the face of collapsing demand for debt in the real economy. The argument is very cogently put by Steven van Metre on the Market Huddle. I certainly believe that commercial banks are the main creators of money, and the Fed cannot make people spend. I am not convinced by van Metre, but I can see that the Fed will not have an easy job creating inflation, as if anyone who has seen what has happened in Japan over the last thirty years will confirm.

$TSLA broke through $2K. The insanity knows no bounds. It just shows what happens when there are buyers but no sellers in a market. The reverse behaviour will eventually be observed, but not yet.