Perhaps even PhD economists notice that manic-mania bubbles always burst–always.

Just a friendly heads-up to all the Bulls bowing and murmuring prayers to the Golden Idol of the Federal Reserve: the Fed just slashed its balance sheet–yes, reduced its assets. After panic-printing $410 billion in a few months, a $24 billion decline isn’t much, but it does suggest the Fed might finally be worrying about the reckless, insane bubble it inflated:

Just to review the numbers, which you can ponder on this chart from the St. Louis Federal Reserve (FRED).

August 28, 2019: $3.760 trillion Will You Be Richer or ... Smith, Charles Hugh Best Price: $10.99 Buy New $11.55 (as of 05:55 UTC - Details)

December 25, 2019: $4.165 trillion

January 1, 2020: $4.173 trillion

January 9, 2020: $4.149 trillion

There are two noteworthy items here. One is of course the panic-printing of $410 billion between September 1, 2019 and January 1, 2020 as the Fed’s assets zoomed from $3.760 trillion to $4.173 trillion in a mere 17 weeks.

But also note that the Fed only added a paltry $8 billion in the final week of 2019. Given the hundreds of billions of expansion being promised, this works out to a monthly run-rate of around $30 billion–not quite the $60 billion promised as a baseline, or the $100 billion per month panic-printed in Q4 2019.

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The Best of Charles Hugh Smith

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