Did Someone Flip a Switch on Friday?

I posted this about a week ago: Signs of the Top: ZeroHedge Cucks. I didn't lay into the site too much because it's a great resource, but as a regular reader, they have definitely shifted in a bullish direction since going premium. Which makes sense because being a permabear doesn't sell well in the later stages of the bear market and certainly not at the top. For example, the chart of cash I posted here: St. Anthony the Great, Pray for Us was interpreted bullishly because a sentiment indicators showed a high reading for "overweight cash." Yet a look at the chart shows cash almost at the all-time low. I've also discussed how I think all the focus on gamma and other "derivatives of derivatives" takes are the poker game on the Titanic. That can be profitable, but I'm here for the iceberg strike.

It seems like a switch flipped on Friday though, because today's stories are relentlessly bearish including reinterpreting that cash chart. My favorite is: Dollar Illiquidity - The Ironic Yet Ignored Spark For The Next Crisis. It's the "DXY to the Moon" thesis that I've discussed here. Massive deflation is the ever-present threat so long as the credit bubble keeps expanding. There's even another article asking if Turkey's implosion signals something negative, which I discussed earlier today.

The news flow is also suddenly taking on a negative aura. President Biden will address the nation on Tuesday about omicron. Not sure what he's going to say or if anyone will care. Lockdowners are already implementing policy and the rest of the country doesn't care. I view an attempt at a national lockdown or some type of punishment for unjabbed as a possible Rubicon for USG legitimacy. If the government can't obtain compliance during a pandemic, when can they? Perception is sometimes worth more than reality. Most governments (and especially central banks) have far less power than is perceived because they don't test the limits of their power.

On the anecdotal but possibly significant news front, a trucking company in Texas went bust. See: The Supply-Chain Crisis, follow links there to the story. How does a trucking company go bust in the middle of a crisis that has spiked shipping costs? Easy: debt. Wait, how does an indebted trucking company go bust when the central bank is pumping billions in liquidity every month? Easy: it's not enough. And they're going to reverse the liquidity and start draining it. As I explained in Asset Inflation Is Over, For Now, the growing credit bubble is like an ever-larger plane trying to stay aloft. Jetliners don't glide. They have to keep the engines running. When the Federal Reserve "rescues" the markets and at the same time, expands the credit bubble, it increases the minimum amount of credit growth (natural or govt/central bank forced) needed to maintain altitude. Going back to 2008, the economy has experienced several events of "depressio-interruptus." The banks were bailed out after 2008, but the system wasn't. Credit growth kept rising because USG took over as borrower of last resort.

Social mood is extremely negative by almost every measure outside of the stock market. I argued at various times that Stocks Are About to Converge With Social Mood, that Negative Social Mood Everywhere You Look and that Social Mood Says Bear Market. Goodhart's Law came to Socionomics: once the Federal Reserve started targeting the level of stocks as an indicator for the economy, it ceased to function as an indicator of mood. Imagine 2008 was really 1929, but the central banks figured out how to fool everyone that it wasn't. Instead of fixing the problem or letting the crisis play out, the central bank and government figured out how to hide reality. It helps explain why censorship keeps ratcheting up and it looks like they're attempting an authoritarian takeover via the pandemic and probably climate change next. It isn't necessarily a controlled conspiracy, but it sure is coincidental that the pandemics are hitting precisely when stocks have reached what looks like a failure point. I was looking for a downturn before coronavirus showed up in 2020 and I was looking for one now, and in neither case did I think the virus was the cause. A catalyst maybe. But if there is an attemped lockdown over a variant that is like a cold, then it greatly strengthens conspiratorial thinking that this is all cover for what insiders know is a collapsing system.

Back in March 2020 I thought maybe the pandemic had triggered "the big one," with yuan devaluation included, but the next day the Federal Reserve came in swinging. It's always possible they can do it again, but I don't think they can. When the next bear market gets underway it is going to topple the financial dominoes. The panic will be greater than in March 2020 because it won't be an extraordinary situation. It won't be external factors hitting the market, but internal forces of debt and default.

A competent ruling class staffed with elites could probably handle the situation. There are solutions such as a debt jubilee. I doubt that will happen though. The Western ruling class are led by clueless Baizuo who don't command respect and don't understand the basic function of government or the economy. Defund the police is the best they've got. They can't tell the difference between a man or a woman. They are not simply irreligious, but openly hostile to Christianity. Their religion is amalgam of racialist cargo cult, scientific dictatorship and pagan Gaia worship. They are the enemies of faith, logic, common sense and reason. They are completely ill-equipped for what is coming. If you think people hiding in their houses with masks on is the peak of domestic terrorism (govt and media terrorizing the public), wait until all the people who have put their faith in false gods stare into the faces of the Gods of the Copybook Headings. The rest of the ruling class behave like barbarian invaders, looting the country of everything that isn't nailed down. Social mood will hit a low unseen in at least a century, possibly never in the USA, not even by the Confederates on the day of their surrender.

There's nothing to fear. The failed system is collapsing. The empire of lies will come crashing down. Great opportunities for profit and power will unfold in the years to come. There is a tide in the affairs of men, which taken at the flood, leads on to fortune.