Bubbles don't finish unwinding sideways, it needs to be vertical

There's two major problems when looking at the SPY today

One - USM2 debasement is a real metric changer
Two - The QE from 2021 has backfired

Things are going terribly wrong for the FRED they know Japan tried forms of QE prior to the 1989 melt up that led to the demise of the entire Japanese economy for decades.

In 2019 its was an emergency and if QE did not launch the GFC 2.0 would have happen during the credit freeze.

The FRED are now trying to taper this path changing direction to not cause a Japan style melt up.

219% was the first warning sign Japan lost control and rates stopped working
205% is your warning sign the FRED lost control and the rates have once again stopped working.

Both scenarios there was too much leverage for a safe landing forcing the BoJ and the FRED to lower rates near Zero.

FRED's idea lets raise rates faster and higher than BoJ did to pre strike a market melt up.

Warning Warning Warning FRED your rates are not working and if the SPY takes out the previous high its going to ignite the final wave of the bubble.

----------------- ----------------- ----------------- ----------------- ----------------- -----------------

If this does playout the warning sign will be a parabolic almost vertical move to the upside once that happens you have about 2 years to avoid the vertical drop.

Why is this happening if its so clear? simple the US government is in a debt deficit crisis the FRED is lying trying to send the economy to 0% inflation you cannot tax no inflation and the government system will halt, pretty soon the FRED will be forced into some form of yield curve control / QE to keep inflation elevated.


Lessons from history YOU DONT PUSH THE QE BUTTON. YOU DO NOT PUSH THE YCC BUTTON. Once you do and your debt to GDP goes past 100% there's no going back without an eventual system meltdown.

Comment:

If this does not cool off this is a major major problem.