We Don’t Need Any Steenking Consumers

By Karl Denninger, The Market Ticker

All we need is for The Fed to encourage and promote the dollar carry trade, and we can pump the stock market to the moon – even though unemployment continues to skyrocket and consumer confidence, a leading indicator of consumer spending and activity, was in the tank this morning.

You need no further proof that the stock market has exactly nothing to do with the consumer or the broader economy – that it has become nothing more or less than a raw casino that responds to one and only one thing – the Federal Reserve and Federal Government’s encouragement of intentional dollar debasement – than this chart, especially today.

Less than 10 minutes after disastrous consumer confidence numbers were released the dollar basically imploded (as you’d expect – the dollar is fundamentally underpinned by the government’s ability to tax, and without confidence and jobs that ability to tax disappears) and as it did the S&P 500 marched steadily higher by 1%, propelled by the simultaneous implosion of the currency.

Folks, this will not end well.  This intentional distortion of asset prices against the underlying economic fundamentals will revert, and when it does the stock and credit markets (which have been “pumped” by equity appreciation) will be destroyed.

We learned exactly nothing from Japan doing the same thing and getting the same result.  We have exactly nobody in Congress or The Administration that will put a stop to it, but you can be certain that it will end, whether by our foreign creditors saying “screw you!” or by the simple over-inflation of the balloon which will explode – just as did the housing bubble, just as is the commercial real estate bubble, just as did the leveraged loan bubble, and just as did the consumer debt bubble.

The difference is that when (not if) it happens this time the risk is to our government and indeed our representative form of government, not to handful of banksters on Wall Street.

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