How we got into this mess

A few days ago Comstock Partners released a Special Report outlining how we got into the economic malaise that is hitting us right now. Their report is spot on in terms of the genesis of our problems being easy money. They also accurately note that we should have had a major recession in 2001 given the historically large tech bubble in the late 1990s.

“The stock market and economy experienced the greatest financial mania of all time in the late 1990s. Companies were going public without earnings and sometimes without revenues and doubling or tripling the same day as the IPO. It seemed like almost any company that had a dot com at the end of their name climbed to levels that stock market students will find astonishing and will wonder how something so absurd could have occurred for such a long period of time.”

It was easy money that enabled us to escape in 2001 without paying the price.

“the debt build up during the late 1990s was never liquidated as you would have expected in a recession. Instead, we experienced one of the mildest recessions in history with minimal effect on the public and no debt liquidation at all.”

It was also easy money which caused the housing bubble. Easy money from a reckless Fed is certainly not what we need now.

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