Ed Bugos, Mike, and Josh argue the Federal Reserve cannot engineer a soft landing because its interventions distort price signals and create unsustainable booms. Real growth comes from savings and investment, not consumer spending, and Fed attempts to lower inflation without recession ignore how the economy actually works.
Chapters
Sam Foreignes. So the Fed says we're wrong about a hard landing. They say the market isn't going to crash, we're not going to have a recession. But has the Fed ever been wrong, guys?
Never.
Maybe it's more like has it ever been right?
Yeah.
So I'm here with Mike and Josh, two of our brightest young analysts. Everyone knows who we are, so let's just get right into it. So, guys, in lay terms, what the hell is a soft landing? And, and let me just, before we do that, I just, I want to say this is, this is what we're going to refute today. We're gonna, we're gonna refute this idea of, of a soft landing. And we want to arm you with the ability to be able to see when it is presented to you why it's a load of crap. So in late terms, guys, you know, what is a soft. Medic. What the hell is it and why do we care about it at all?
Well, it's the idea that the Fed can raise rates to lower inflation without causing crash or a recession, you know, in, in their words, so they can slow down the economy, which it, which it blames for the increase in inflation to begin with. You know, another term that they throw out that I, I like is immaculate disinflation.
What does that mean?
Like, well, it means that, you know, that they can get rid of the inflation, you know, immaculately. You know, it's a, it's a religious reference, you know, as in the Fed can do no sin. Right.
We could bring down the inflation problem, which we didn't cause and.
Right.
And it won't, and it won't hurt a single soul.
Yeah, exactly. Yeah, that's, that's it.
Yeah. So I've got, Do you agree with that definition of what is.
Yeah.
Bringing down inflation without dipping the economy into a recession is.
Yeah. So why, why do we care about this at all? Right. Why do we care? Because I, because I predicted that the markets are going to crash. There's one good reason. Right.
Well, it's the, I, I, you know, the idea of a soft landing, I think is a myth in itself. And I think if we understand, you know, how the effects of the Fed's policy and intervening into the markets, you know, this idea that it can intervene again and not cause problems, it doesn't make any sense.
True. But why do we care about this topic? Why should our viewers continue to watch what we're going to have to say about this? For instance.
I think it could have a large impact on their lives, depending on their financial situation and their work and their investments.
Yeah.
All three of those are going to be affected.
Right. So as Mike was saying, in order to. To refute this myth, we want to help you understand how the economy actually works. Okay. Surprisingly few people know how it does. And honestly, if you haven't read any of the Austrian school work, you really. You really don't. You don't know how the economy works. I'm sorry to tell you the bad news, but. But you really. You don't. Right. So what is an economy? We hear this term the economy. What is it?
Well, what is the average.
Sorry, Mike.
Yeah. Oh, I was just gonna say, you know, it's, you know, in very simple terms, it's. It's all the economic activity within a society. You know, but if you really. If you really want to get into what is economic activity, you know, it's kind of like, you know, a society is an organization. It's. Society is just a whole bunch of individuals, you know, kind of working together to organize scarce labor and capital, you know, with the intent of satisfying our needs and our wants, you know, both now and in the future. So, you know, the cooperation between all these individuals is economics, you know, and the. And the economy is just, you know, some of all that activity. That's the way I look at it.
Yeah. You said something I think that drew my attention is that labor and capital is scarce.
Yeah.
Get out.
Yeah. No, it is.
Oh, really?
No, and it's like. And.
And.
No, but that.
That. That's exactly. I mean, I'm not making fun of you. I mean, that's. That's exactly the. That's exactly true. It is scarce. And that's what people don't understand is you can have. There's only two ways you could direct production. You can direct production from the top down or from the bottom up. Right. And. And when you're doing that, you're allocating a scarce amount of labor and capital to the production of. Of things that are also scarce. That. That's why they, you know, that's why they have value to us. Right. Yeah.
And that's why I think, you know, economics is. That's what the economy. The economy is doing. You know, it's all those. It's. It's. How are we organizing those?
So this. Yeah. And so the standard definition, you know, the dictionary definition is if you ask. If you define. If you punch in the word economy, it'll spit out the definition that it's the wealth or resources of a nation. What my dictionary gave me. Right.
Resources.
So the wealth or resources of a region is the economy. Right. So presumably economic growth would constitute growth in the wealth or resources of a region. Okay, but how do you grow wealth? What is it? Is it just like a bunch of stuff?
And it's anything that I think has, has value, you know, that it, that it satisfies a human need either now or in the future.
Right, right, right, right. So you think of anything that, that was a, that you know, that was. Cons would have been considered wealth or a good today, that is considered a wealth or good today that might not have been in the past?
Oh, yeah, for sure.
Yeah, yeah, a lot of things.
You know, I mean, oil wasn't always an economic good, Right. It laid there under the sands in Saudi Arabia and wherever else in America and, and in Russia and Canada for, I mean, millions, millions of, of years and, and thousands of human years before humans really attached any real value to it. I mean, you know, it was used in small applications here or there before the 18th century, but, but it really wasn't, it wasn't scarce. And you know, you would use, you'd see it, you'd use it for whatever you throw it on, maybe on your arrow or whatever. And, but it wasn't, it wasn't scarce. Right. But eventually, eventually became a good and it became increasingly scarce something that consumers valued. So we built machines to find it, to produce it, but not just for the next day, for many years going forward. Right, because this is where I want to sort of distinguish from the standard definition of the economy is that one economist put it this way, said that, and quoting Menger, which is the founder of the lesbian school, said precaution and provision in relation to wants and needs represent the core of the economy. So people are concerned for the satisfaction of their needs and thus also about providing for their future needs and wants. Okay, so the quote, provision for future needs, unquote, quoting Menger in principles, represents the essence of the economy. Okay, So I was trying to talk slowly so that it can absorb what I'm saying. So, you know, as you said earlier, society is essentially economic cooperation. Right? So that's what an economy is. We cooperate to build things not just for the present, but for the future. Yeah, right. So if that's what an economy is. What, what's growth? What then is growth? Is growth just, you know, if we, is growth just an increase in any old pile of goods? If, if we say we ran a command style economy and told everyone to produce just TVs and if the next year we produce more TVs than last year, is that growth?
No, it's not growth unless that's the only thing humans wanted and needed insurance growth. But it's, it's, it's all, it's all about, you know, with society needs, society wants. And so the, the economy is growing if more and more of those needs are being met.
Right. I mean that's what Menger means. Right. In the provision for a future, for future needs. Whose needs? Obviously the consumer's needs.
Yeah, society of society as a whole.
Not saying the needs of the kings or the needs of the politicians. You say the people.
Yeah.
You know, every person, in economic terms, every individual is both a producer and a consumer. Unless they don't work, then they're just a consumer. But, but instead, you know, every, you know, everybody, every individual, you know, that is part of the economy that isn't say cancer on it is both a producer and a consumer. Right. So you know, just the producing production of more TVs or more stuff, you know, isn't obviously what is consum. And it sound, it might sound absurd to even talk about it this way, but really when they talk about stimulating aggregate demand and creating jobs for the sake of creating jobs, that's what, that's what they're doing. That's what they believe. They believe that they can just, just by just economic activity alone is a good enough measure of growth.
Yeah. Or the MMT people arguing that the more debt we have is great because it's, it means that, you know, we spent more money, so it doesn't matter what the money's been spent on it. It's good we were causing growth.
Right. So, so we sort of, we, we've established that in an unhampered free market system, production is going to be guided by consumer wants and, and needs. Right?
Yes.
Which, so, and what I like to say is that the consumer is the north star for capitalists and entrepreneurs. And the mechanism for following the North Star is the profit and loss system. Because I mean the emergence, the emergence of money and money prices, I mean people are, It's a different world than it was few hundred years ago. You know, I mean the emergence of money and money prices for, for goods to. That transformed everything itself. Right. It allowed us to calculate how to use things efficiently. Profits only occur in a free market if the producers are meeting those consumer wants. Right. If they're not, you're not going to sell your good. And, and if losses occur, that means you're not meeting consumer wants. And needs. And so then you fold up that business and the capital labor gets reallocated to. By a smarter entrepreneur or by the same one if he's learned per mistakes to a, to something that consumers want. Right. So this is the invisible hand that Adam Smith wrote about, except he didn't understand it the way that Ludwig von Mises understood it. Right. In, in. In an economy, you know, you are contributing value and wealth if you are, if you're making a profit. Growth is apparent when consumers are getting more and more stuff or more and more choices. Not just more and more stuff, more and more choices. And they can buy more and more of the things they want with the labor they sell. Right. So their standard of living rises. Do you guys agree with that?
Yeah, 100%.
Yeah.
Fundamentally it's, it's like taking a farmer and in a small town and as soon as they start to specialize, everyone gets more of kind of everything that each person can produce in their individual field.
Well, you know, the Marxists really disagreed with that specialization angle. Right. Marxists believe that specialization is sort of the, the root of evil of, of mankind. It separates us from our goods. Right. You know, the man who's, who specializes in, in building screws has no. Is alienated from. From the production of all these other goods that he needs and wants. So mar. In a Marxist view, the, the guy should be a generalist, produce every. Be good at producing everything rather than specializing.
Well, I think the guy, I think the individual is the one who should be making that decision. They want to be a generalist or they want to be a specialist?
No, absolutely. That's where the Marxists fail to. Fail to. But you're right, it's just, you know, if, if that's the case, why do you have to force somebody to be a generalist?
Like you said before, it's about, it's about increasing the choices to the consumer, you know, and, and choices that, you know, that they are actually interested in and, and satisfying needs and, and wants that they actually have, you know, so that they can, you know, they can free up their time. You know, so they're not spending all of their labor, you know, just covering the basics of living. You know, if that stuff is covered and then other things are covered and then they have options to explore their passions or their interests. You know, they have the choice to specialize into something or maybe they want to be a generalist and know a little bit of everything. It's like, sure, by, by you know, advancing an economy in that way. It really Increases freedom overall for everyone as well as the standard living.
Yeah, absolutely. Yeah, no, that's right. I agree. How can we know if you're making a profit if you have a very powerful organization manipulating prices and interest rates?
That's the trouble. Right. It's like the manipulation of, of, of interest rates, especially the prices too. It, it distorts many of the economic signals that businesses or entrepreneurs look at. You know, when, when calculating, you know, if, if, if a certain endeavor or, you know, business idea is even worth executing, you know, that they need to calculate if it's worth the effort. Right. And if you're distorting these, these key signals, it kind of, it can, it can kind of trick businesses into putting their scarce resources and labor into the wrong avenues. And you know, the longer that these distortions are allowed to have, you know, the more errors can occur. And you know, and it, you know, it doesn't just undermine, it also it impedes, I think, you know, if entrepreneurs are making bad decisions. Right. Any bad decision that's being made, you know, because of this, these distortions and key economic signals, it's really impeding other wealth generating activities that could be going on because it's slowing, it's, it's drawing down on that same pool of wealth. Right. But it's being put into areas that society doesn't actually want or need.
Yeah, I guess we could have. Also dealing with that and dealing with a previous issue, we could, we could also refer to the broken window fallacy that Bastiat wrote about, which is, you know, how, how often the Keynesians and central planners will argue that that war is good for the economy because.
Yeah, right.
But their argument is that the, that war is good for the economy because it boosts spending. You know, I mean, we know what's wrong with that.
It'd be like the same thing as saying, you know, then we should just hire a bunch of people to dig holes and then we should hire a bunch of other people to fill those holes back in.
Right, right, exactly. But also there's another point in, in that what's happening is that if you go around breaking all the windows, sure. You're going to create a boom for the window makers. Right?
Yeah. Or makes a boom for the, you know, military industrial complex.
Right. But the, the capital labor that you devote to fixing all those windows could have been devoted to making more hamburgers or more, more suits or more whatever that people actually needed. But now they don't get because they, we have to fix the windows. Right.
And it goes back to the idea that there's scarce labor and resources. It's not like there's an infinite supply. So if it, if it's, if it's going over to the broken windows or it's going to war or digging these pointless holes, it's not going somewhere else. It's just matter of fact.
Right, so could we say that when, when. Whenever they intervene in money and prices and interest rates, they're generally diverting production from consumer wants.
Yes, generally. I mean, I'm sure sometimes that, you know, some. Something goes. Right. But it's, it's not, it's, you know, it's. It's not the consumer that's directing this. The it anymore. It's like you've taken, you've taken the, the, I think, to use one of your terms, the Northern Star is like you've taken that. That away.
It.
And so without the proper economic signals, you know, it's not the consumer that's now directing where these resources go. And, you know, it'll just, it'll just be a crapshoot if it ends up going somewhere that it should, and it probably won't.
Well, and you actually brought in another argument of Mises, which is the, the calculation problem of the state, if it ignores profits and money prices and so forth. Right. Is it doesn't know if it's creating value at all. But what we do know is that it's diverting production away from consumer wants.
Right, Exactly.
Right. If every intervention by the state all does. Is it just shifts production away from what consumers want, what happens when the intervention stops? The resources have to get allocated back to where the consumers want. Right?
Yeah.
If they allow it.
Right, Right. Right. Now that we know what the economy is, okay. We know what growth is. Increased standard of living, you know, increased happiness. Ultimately, what drives growth, Guys, like. Okay, so let's, let's help our audience understand what drives growth.
Investment. Investment. And you know, and the investment is. It's, it's other than gets. It's driven by savings. You know, it. Hopefully real savings, but it can also, you know, fake growth can be driven by fake savings, which is, you know, the manipulation of interest rates.
But.
Right, but it is savings and investment that drives growth.
It's not consumer spending.
No.
For growth, we have to increase the, with the wealth and resources of the group. So spending is not going to do that, but you have to invest in something productive to get that growth.
Let's rewind a little bit and, and let's talk about interest rates. Okay. Let's just Quickly, talk about interest rates. What are they? Right.
Measurement of savings.
So high rates signal the need for saving, right?
Yeah.
If there's a lot of savings, then, you know, the rates should be low because there's, you know, that we don't need that much. But if the save, if the savings pool gets tight, then there'd be more demand for it and so, so the interest would pay more.
The reason for low interest rates is a reflection of the want to save.
Right.
A low time preference rate for individuals, a low interest rate will reflect a society where individuals have, have more that they want to save. Right. But it's not like as if they let the, the savings build up before they invest it. They save and invest all, basically all one scoop, right? Investment is what drives growth, but investment can be driven by voluntary savings or forced savings, which is, I believe, what you were trying to say, right?
Yeah. Fake savings.
Yeah. Right. In the case where the, where you get these forced or fake savings, it's obviously not driven by consumer preferences. Right. So it's not like as if consumers are, it doesn't reflect consumer time preference. It doesn't reflect what consumers want. It's driven by. This kind of growth is driven by artificial incentives that ultimately come to rely on a continuation of those artificial incentives. Right. Because otherwise, like I said, if you pull away, if you pull the intervention away, what happens? Well, the structure of production, which was oriented in one way, it's got to find its path back to what consumers want. But the creators of the Fed, and we're getting to the soft landing myth here, but the creators of the Fed say that the Federal Reserve System, they created it because the market system is, is inherently unstable, is volatile. That the free market system, if you leave it alone, it's just going to have booms and busts, it's going to have depressions, it's going to be subject to overproduction or under consumption. And the Fed has to manage all of this, all of these difficulties.
Oh yeah. It's the only one that can. The hero.
So what do you guys think of that?
I know it's, to me, it's like the classic problem reaction solution set up, right? The Fed creates the problem, but then it, you know, it, it, you know, it is the ultimate cause of the booms in the bus, but it will never admit to it. And then when the inevitable reaction comes, it proposes a solution which is actually the same thing that caused the problem. It's funny how that we, we still fall for it.
In a free market economy, there's Rolling exchange of business leaders. You know, Schumpeter talked about that and. Yeah, so there's, there's companies that go under, maybe whole sectors get hit by a drought, but it's never the whole economy that's under pressure because of one entity making an arbitrary decision.
Right. Because the, the industry that's becoming obsolete is becoming obsolete because a new one is.
Yeah.
It's not as if it. Ops becomes obsolete in a vacuum. Right. There's a dynamic process that's going on. Correct. I believe that that's the case. Right. You guys know that the Austrian school is the only school that argues that, that free market capitalism is not inherently unstable. Not that it's not changing. There's, it's dynamic. Yeah, but it's not, it's not systemically unstable in the sense that the, the Fed guys try to argue.
And if anything it's, it's self regulating. It doesn't need, it doesn't need management. That's the beauty of it.
Right, right. And so it's the Fed's interference in prices and interest rates that as you said, might cause the, the financial and economic instability in the first place. Yeah, it's, it's their interference.
They use that to justify their very existence. Right. And, and people still are still buying that.
So given this, how can the institution that causes the instability be the solution to the instability? How does it create a soft landing if it's created a. If it's diverted production unsustainably away from what consumers want?
Yeah, I mean that's it. It cannot, it does not have the power to do that.
Sure.
So, so this obviously is, you know, we're, I mean we're trying to pierce through the armor of all the propaganda out there and in. And I hope we, we're doing it because you should at this point start to see h. Well, soft landing is pretty much impossible if you got this institution that's ignoring consumer wants and just going about its business itself and then creating the inflation that it purports to be fighting. And you know, it's. What a mess. And it really is a mess. Right. So, and so this is in part why the, the, their record of achieving a soft landing is so terrible. Right. Out of 21. I think it's 21. Is it 21 or 23 rate hikes since 1913, since their inception. I think only one of them is a, is a success. And that was in 94, 95. Yeah, I think they, they that, that, that the Southlanders will claim that there's a Couple others. But you know, I, I believe that those, those are, those fall in our category because it's just that it took a little more time for the hard landing to occur in those instances.
Yeah, but that's kind of the, you know, some people might now even argue that the, the Fed has achieved a soft landing or they're convinced that it's, it's on the cusp of doing it. You know, and, you know, we could even speculate that in, in the future. You know, let's say we do get a hard landing in, in six months from now, a major recession. History books might re, rewrite history now as saying that no, the Fed achieved the soft landing. Just, just, it's all part of this scop, right, that, that the Fed that can fix the problems because there's a wave of people right now that would look at the inflation coming down, you know, the job market being strong, the stock market being high as proof, proof the Fed has succeeded.
Right. So what. Well, that, that brings us to a point. So at what point can you say that we've, that you've succeeded at what is there a point at which we can say? Well, I mean, is it when inflation comes down to, what's their target? 2%, 2% on their manipulated statistics. So when, when it comes down to their, when they say it come down to 2%.
I think what, I think what everyone's looking for is that, yeah, the inflation comes to 2% and, and then rates normalize. But what is normal? Like, I think people think that, you know, near zero interest rates is normal. It's like, because that's, that's the only, that's what's needed to even possibly sustain this fake growth that we're in right now.
Right. Well, so you're adding two conditions. You're saying inflate they, they have to defeat inflation and rates have to come down. Yeah, well, yeah, right, because those, to me, those are two separate things. And you know, I've argued in my newsletters that bringing the inflation rate down to 2% doesn't necessarily mean they can bring the rate down as well. Right?
Yeah, we'll see that they can't. We'll see that they can't.
Right, right. The, while we're on, the, while we're on that topic, though. So, you know, I think, I think this is, this is the interesting part is because at the moment we can still see the, the trend in economic activity, even activity, never let profits. You know, let's, we want to talk about the real stuff, you know, profits peaked in 2021, right? Pretty much. There's, they, they've kind of, they went down. They're up a little bit above, above the 21 peak, I think on a quarterly basis, but I'm not even sure about that. But you know, for, if you zoom out a little bit basically there, the profits have, have peaked two years ago. Right. We can see that the, generally the rate of job growth has slowed. We can see generally that that gdp, even their, their measure of economic growth has slowed. So so far there's been continued slowing. Has there been a, any lift off at all?
Yes. And stocks. Just stocks?
Yeah, yeah, just stocks. Right, so which are basically expectations.
Right. But no, there's so many signs like the, the, the consumer is weak. How many, how many major real retailers are coming out and they're saying that there's, they're missing sales expectations because the consumer is weak. They're only spending their money on essential things. We keep hearing personal debt levels exceeding. There's these new buy now, pay later loans that we can't even track.
Yeah, yeah, for sure. And no, I, and I agree. And so that, to my point is, well, if you're going to achieve success in a soft landing, don't you, don't you want it? Isn't it something that you should have left behind? Shouldn't it be like, okay, now that we're growing again, we can say we've achieved a soft landing. Right?
It's like you got to land the plane, get the passengers off, reboard, and then take off again.
Right, right, right. Then you can say we hit a south landing. But as long as you're coming down still. Right?
Yeah, yeah.
You haven't even hit the Runway necessarily. Right? Yeah, we haven't. Because let's say the Runway is their inflation target.
Yeah, no, they haven't even had.
You haven't even hit the Runway and you're claiming successful soft landing. Well, why would you do that? As a pilot, you'd want to calm everybody, massage everybody's fears.
Soft landing is, that's what it is. It's a freaking psyop to convince everyone that the Fed is still in control, that it has things under control and that we need it to be, to be managing this.
Right. You know, like, and, and so maybe we can post some articles from past cycles too. And it's, it's, it's common, right. Just before a crash, they're always claiming.
Yeah, 2007, there's a, there's dozens of headlines, you know, praising the Fed to saying that they either achieved a soft landing or they're, they're on track for one. It's just around the corner. Very similar to. We see now, you know, these soft landing headlines that, that have been in the news this, this time around, have been going on for over a year and a half, is this goalpost just keeps getting moved further and further and further and further back. So like you said, the plane's coming down, but it's never actually landing and it's certainly not getting reboarded and about to take off again.
Yeah, so, and you know, not everybody understands how the economy really works, especially at the Fed. They would probably be in well advised to watch this video. But then again, they would, they would probably just, the smart ones would probably just watch this video to learn how they can manipulate everybody's expectations. Right? Yeah, but, you know, I mean, I think the dumb ones, they believe that, they believe in what the Fed is doing. They believe that the free market system is inherently unstable, that it needs this management. They believe that, that the key to growth is consumer spending. They believe that the key to, to, to growth is making sure the consumer is confident. So that's why these surveys of consumer confidence. Right. So, and, and, and that's really what, you know, when the Fed is perpetuating its soft landing myth, that's what it's really aiming at. Consumer confidence is aiming at that. It's aiming at preventing investors from selling their stocks. It's aiming at delaying the adjustment process. Right.
So kicking the can down the road. That, that's as far as possible.
Which is why even though they've been running a deflation policy for two years now, it hasn't really kicked in yet. This is why the lag has probably been as big as they have, because they've deliberately trying to offset it with their rhetoric. Yeah, right.
It seems like they would just, it seems like they would just love something to occur that had nothing to do with them. You know, like, like a war or another pandemic or something that, you know, basically let it, you know, will be blamed. That's what we will be the blame for, why things fall apart. And it won't be, no fingers will be pointed at the Fed and then they'll, they'll be able to play this game all over again, you know, justify their existence, continue to justify their existence. It seems like they just, it seems like they're, they're working at all costs to avoid, you know, a hard landing that gets pinned on them.
It's like Rothbard had a good quote on that once in one of his books he wrote about how it's the, the central banker is like the, the, the bank robber who finishes robbing a bank, gets out, the bells are ringing and he's running down the street and he's pointing across the street to the other guy. Yeah. Diverting everybody's attention to that guy and blaming it on that guy. Right. Yeah. Yeah. So I mean the thing, the thing, not to beleaguer the point too much, but the thing about measuring growth by, in terms of consumer spending, aside from everything else we've talked about, is that you don't really know if, as opposed to measuring it by investment and, and production, you don't really know if consumers are, are spending out of their new wealth, that new wealth being created and we're getting wealthier. So as, as people like Ed Yardini like to say is because we're getting wealthier even though he measures his we, the wealth in stock, the me. The value of financial claims and so forth because we're getting wealthier. Then, then, then if you measure consumer spending, that's, that's what it refers to. So, so the average person will look at the expansion in consumer spending and say, well, I guess we're getting wealthier. So the growth in consumer spending for that person reflects growth. But you don't know if the. If, what if because of the artificial incentives, instead of spending you. Well, we're spending our savings. Right. Because we're miscalculating the effects of inflation, for example. I mean the problem with forced savings and artificial growth is that because it bypasses consumer wants, it may, you might as well. When you're stimulating top down, when you're stimulating spending, you might as well be producing nothing but TVs. Okay, so the stuff that's being produced under the, the artificial incentives is not, it's, it's not aligned with consumer preferences, it bypasses them. So when the, that policy has to be abandoned because for instance, it creates inflation, which they say it doesn't, they blame on other things. Then, then, then when, when, when they have to abandon the policy in the name of fighting this external evil, inflation caused by capitalists, they, the, the, the activities that, that were supported under the artificial policy have to be liquidated. Right. So the unsound boom, in other words, it produces a bunch of stuff that isn't really wealth, but while it's being produced, the labor and capital producing it can't produce what is more urgently needed.
Exactly.
Until the north, until the North Star illuminates that path again. What have we learned?
Resources, labor and capital are scarce.
And hopefully we've learned that the soft landing myth is a myth. Yeah. It's not only. It's not only a historical unprecedented type of achievement. It's. It's a myth. If you understand how the economy works. It's a. All it is is just a psyop, as Mike said. Yeah.
So it's there to just. Given that the Fed's existence, it's there to justify further intervention.
Right. So given that the post 2008 bull market in stocks. I always hesitate to call the whole stretch of one bull market, but it pretty much you could. Given that the post 2008 bull market in, in. In financial claims and, and the supposed economic expansion since 2008. Okay. Given that those things were built on one of history's most aggressive. Inflation in money and debt and the all but annihilation of interest rates, which you've learned has purpose. How can the Fed achieve a soft landing in this insane of a bull market? Instances through history, the central bank has.
Really just painted themselves into a corner. Really kind of stuck at this point in time. You know, if they raise interest rates from here, it most certainly will cause of the recession that they're trying to avoid. And if they lower interest rates, it'll just undermine.
I mean they can, they can only. While they're raising interest rates, they can only talk entrepreneurs out of liquidating their unproductive assets for so long before they finally have to. Right. Yeah. Well, I hope that, I hope we did a good job in exploding this myth that seems to make the headlines every too frequently, let's put it that way.
Just before a hard landing.
It's like an indicator. It's almost an indicator.
It is really, it almost an indicator.
Yeah, actually you're probably right. It is a good indicator. Right. So let's leave it on that note. Unless you guys have anything to add.
No.
Right on. So over and out, vigilantes. I happy to serve. And good trading. Peace.
