March 14th Release from PBS' Frontline: "The Age of Easy Money"

Prescient views from Stiglitz, El Elrian, Grantham, and others.

Especially spooky is one young analyst (he’s an Economist for the NY Fed, named Lev Menand) who describes what pressures he was under during the worst of the COVID closedowns.

This investigative look at the Fed starts a timeline from 2008 to the present, and it warns us what mistakes were made during QE, PPP during Covid, and QT. It looks at shadow banking.

How the banking and shadow banking companies used Easy Money to fuel

The Fed kept rewarding the worst actors who were undermining our Economy with Moral Hazard. We taught the worst greedhounds that there is no downside to risky behavior.

Bailouts are baked into Late Stage Capitalism: the No Lose Casino.

Neil Kashkari talks about how upset he was in 2020 that America’s Fed had to finish the work from 2008. He doesn’t feel the Fed led to these vulnerabilities. He feels the regulators have dropped the ball.

When investors saw the stock market rise during COVID from the Fed pumping $120 Billion monthly into the economy. Over the next two years, tech stocks soared. Stock buybacks out the ying yang. The world’s richest became obscenely rich. The wealthy grew their wealth in one year by $1.2 trillion.

This free money also inflated stocks, loads of companies not making profits, and whose founders talked great games, while cashing out options they got solidified during their IPOs.

Meme stocks exploded. Crypto gurus developed huge followings by investing in speculative shitecoins which exploded in 24/7 trading. Money was so cheap, that Ponzi schemes run by nefarious Libertarians, were promoted by extremely well-paid celebrities. Jimmy Chanos gives the best look at crypto in this film.

When inflation spiked, stimulus money was sent to needy Americans ($1,400) who boosted consumerism and shortages spiked during COVID. Prices rose rapidly during 2022. In only a few months, inflation spiked above 4%, then 5%, then 6% and onward. The Fed made no moves to tighten. The Fed told us in the beginning of this inflation spike that “Inflation is transitory.”

El Erian & Roubini explain how concerned they were during 2022 as the Fed dumped another $4-5 Trillion into the Economy - which led to the highest inflation in decades.

El Erian explains the CEOs who talked to him in 2022 did not think we were going through “transitory inflation.” He thought this was “stickier.” Kashkari tries to explain why he felt this inflation was transitory.

Meanwhile, as inflation exploded, we visit food banks during 2022 with lines in the hundreds. The uptick started in February 2022, and the increase in one food bank’s new users spiked 26% from 2021-2022. Inflation ate away emergency or “rainy day” funds for people who hold jobs and who used to think they were Middle Class. Rent increases, and the price of food, have driven these new clients to Food Banks. One Social worker describes people who are angry and in distress with credit cards, rent, and food on the table. Many of these stressed people

How all this leads to what happened last week will be explained about 3/4 of the way in.

This is a very good concise look at the Age of Easy Money:

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Towards the end, pay attention to how many Economists are predicting more carnage in our markets. One guy who specializes in restructuring companies and governments (sorry, can’t remember his name, but I do need to go back and learn it as this guy is very pessimistic about what is happening) He says he has never been worried more than now, and he’s been in this business 48 years. The Credit Bubble is popping in the views of all these bears interviewed.

Kashkari, before last week, was very bullish about the Fed, more than anyone interviewed. I’d say the more than dozen folks interviewed are very bearish.

Cheap and free money, without consequences, led us directly to $SI, $SIVB, $SNBY, etc. We lost sight of how to grow our economy. The world of easy money went way too far.

El Erian tells us this is not a Fed problem, but a political problem.

Everyone should view and absorb the red flag warnings.



It’s an environment where we through GOBS of money at everything perceived as a problem. No longer do we talk about billions going to this or that, it’s Trillions. THAT is disturbing. To me, at least.

But, I have to admit to having my own “sacred cow” in all this… I think it’s a good idea to keep sending weapons, ammo and spare parts to Ukraine. As well as supporting with intel. I’m not sure how widespread that thinking is these days.

Other than that, I’d like these mega… no, giga…no, what?… megaXmega? spending efforts squashed.

He is no fool who gives what he cannot keep to gain what he cannot lose.