Didn’t the world of finance used to be staid and sober?

It’s a sorry state to live within a context of social insanity. I’d love to come back in the year 3000 and see what they say.

Between destruction of habitat (which, obviously, will affect our own habitat eventually) and the Nuclear Winter threat, some people think humanity will be gone by 3000. I don’t think so. The human creature is so very clever. I think we’ll still be here, somewhere, somehow. I do think civilization devolves from the point of extreme overshoot that we’ve reached. There needs to be fewer humans and I think there will be. We ought to live more simply and more locally and I do think that will come about, slowly, over the span between now and the year 3000.

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Will the records of recorded history survive? Will they still be able to see the 47 billion trillion pictures we took of ourselves between 1850 and 2250? The billions of words/images of my blog and those of everyone else posting and podcasting and cyber-recording?

Hopefully they will recognize the insanity and not still be in thrall to it.

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Surely they’ll say: Imagine tying the fate of the productive economy to a bourse!

We call the latter: The Stock Market.

A thing about scale is that as things get bigger and bigger, more and more hyper-scale, the distortions tend to get greater and greater. That’s why, as our mass society gets more and more massive, inequalities get more and more extreme. By now the inequalities have, of course, gotten breathtakingly egregious and obscene.

Likewise, the insanity of the stock market gets more and more insane. Wild and crazy gyrations. The latest melt-up took the market to the crazy-highest point of over-valuation in all of market history. Higher than the notorious over-valuation of 1929, from which point the market proceeded to gyrate to the down side and lose 90% of its value by 1932.

The second-craziest gyration was associated with the Tech Bubble of 1995–2000. After its peak the tech-heavy Nasdaq index lost 82% of its value by 2002.

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There’s an idea that the long secular bull market that began in 1982 is now peaking. At such a peak after such a long-wave expansion what you tend to get is extreme volatility until the inevitable crash.

You get volatility because: On the one hand, rational people can see that the market has gone too high and they start selling. On the other hand, for over forty years investors have benefited from the notion: “Buy the dip.” Every dip since 1982 has been a good buying opportunity. For over 40 years the market always wound up higher before too long. After all, the markets have been able to depend upon the Fed coming to the rescue with crazy-stimulation to buoy up the economy. Great profits have been made buying the dip … for decades.

So half the people will keep buying the dip and driving the market higher with every downturn. But half will say “Get out of here” with every new market high . . . because the Fed is finally starting to be limited by its self-induced inflation.

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Volatility, up and down, until The Reckoning.

Markets over-valued, debt out of control, Fed limited. Crash.

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After the crash things could get even crazier. (Imagine reading about this story in 3000. Will they still be able to make movies about such things?)

Even crazier because the Fed will feel compelled to go insane. Its balance sheet historically has been less than $1T. The Great Globalized Financial Crisis of 2008 scared the power elites so much that the Fed ballooned its balance sheet to an unprecedented $9T. Interest rates shot up, so after 2022 they started to try to rein it in. But the next crash will be so severe that they’ll have to go back into ballooning mode. David Hunter expects $20T. Naturally, after that, a ballooning of inflation again. Interest rates to 20%. The accumulated debt (since 1982) will become unsupportable at those rates and will bankrupt the whole system.

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What ever will they think of us in the year 3000? Money sloshing around like crazy. Speculation distorting the markets. The markets driving the economy. Worship at the altar of the Gods of Finance.

My speculation is that they will have, by then, learned what sanity is. They will have, by then, sagaciously come back down to earth.