The Federal Reserve's arrogance is exemplified by spending $2.5 billion on renovation of their buildings while having 200 PhDs on staff, suggesting institutional detachment from reality and fiscal responsibility.

In April of last year (2024), the market came very close to a halt in the NASDAQ futures, with only a couple of ticks remaining before circuit breakers would have engaged, suggesting the passive bid was inadequate to support a move down and indicating fragility in the market structure.

For the average American citizen, the inflation outcome that the Treasury is attempting to achieve would be very bad and they would be happier if the government stopped the nonsense and pursued sound fiscal policy instead.

Texas Instruments' recent poor guidance and stock drop of ~12% illustrates the broken price discovery mechanism: bad news finally arrives and stocks collapse all at once instead of being discounted gradually.

The stock market is being held up primarily by the passive bid—mechanical, algorithm-driven flows—and not by fundamental economic strength or earnings, meaning stock price movements have decoupled from business reality.

If the Fed were constrained by a gold standard or money supply control, interest rates would be significantly higher, the economy would be weaker, government spending would have to be cut, and these programs would need reduction, but this politically unacceptable outcome shows why politicians will never agree to sound money constraints.

The bond market is the critical constraint on policy: if it refuses to finance the deficit at any price, rates will spike, GDP growth will be strangled, and the entire strategy collapses.

The Federal Reserve has caused enormous damage to the economy and society by enabling serial asset bubbles starting with Greenspan's low rates in the 1990s, which prevented normal market consequences and allowed Congress to avoid fiscal discipline through decades of deficits.

The analogy between debt policy and getting drunk is apt: in the early stages of monetary expansion everything feels great and the economy seems strong, but eventually the excess produces negative consequences, yet while 'drunk' people feel better than ever which makes them reluctant to stop.

The only sources of genuine optimism in the current environment are human ingenuity and the possibility that the political pendulum might swing back from socialism and lawlessness toward rule of law and productive discipline.

Normally when governments attempt to inflate the debt away, creditors respond by refusing to extend credit or demanding higher rates, but currently the Treasury is trying to suppress that market reaction through regulatory and policy mechanisms.

Fed policy has caused massive wealth bifurcation in the country: those with capital benefited from asset inflation, while those without capital did not, contradicting capitalist principles and leading to social instability.

The consequences of bad monetary policy often lag the policy decisions by significant time periods (25 years for deficits, 3 years for inflation, years for asset bubbles), making it difficult for people to connect cause and effect and therefore hard to build political support for sound policies.

The next Federal Reserve chairman will almost certainly cut interest rates, and the current Fed chair Powell has been reluctant to cut rates partly because he and the Fed prefer the prior (Biden) administration to the current Trump administration.

The media lacks knowledge and credibility, has a political agenda, and fans the flames of division, making it impossible for the public to understand monetary policy or support sound fiscal reform.

Employment data appears strong at the headline level, but beneath the surface employment is weaker than it looks, particularly for college-educated young people, because the BLS job creation number relies on the birth-death model which makes questionable assumptions.

The current administration and Treasury (under Bessent) are attempting to finance the massive $36 trillion national debt primarily at the short end of the curve by inducing banks to buy short-term paper through increased leverage ratios, which could unleash approximately $3 trillion in new bank carry trades.

The passive bid's inflows are shrinking but still sufficient to support stock prices, creating a situation where the market can chug along until employment collapses or retirement withdrawals accelerate, which would cause a sudden shift.

The only way to return to sound money policies is through an epic crisis that forces people to accept necessary pain, since the political system is incapable of making proactive reforms without external pressure.

It is critical for young investors (25-35 year olds) to understand how the passive bid works and the market structure that drives stock prices, because without this understanding they will learn the wrong lessons about how markets and investing actually function and may make poor long-term decisions.