I’m not trying to assign blame but…

This man might just be responsible for the most economic pain the world has felt in the last 15 years.

And create a number of incredible trading opportunities along the way.

That pain is just starting to bite.

U.S. companies have already laid off hundreds of thousands of workers with more cuts planned by the end of the year.

60% of Americans are living paycheck to paycheck.

Doesn’t feel normal does it?

I’m sure you’ve heard about SVB – the bank that collapsed overnight? Then followed by Signature Bank and First Republic.

That man is responsible. And he was just trying to do his job!

You see, many analysts believe we are on the brink of an “everything bubble” that is ripe and ready to pop.

It all started in 2008, when two Bear Stearns hedge funds collapsed and Lehman Brothers filed for the largest bankruptcy in US history.

Financial institutions were left holding trillions of dollars in near worthless subprime mortgages.

So Congress created a 700 Billion dollar Bailout called TARP to help save the financial system.

They cut rates to near zero and started an unprecedented program called quantitative easing.

In March 2009 – 2010, the Fed purchased 200 billion in agency debt and 1.25 trillion in mortgage-backed securities and 300 Billion in long term treasury debt.

On November 3rd 2010, the Fed announced an additional 600 Billion of purchases of treasuries and on September 13th, 2012 monthly purchases of 40 Billion in mortgage backed securities.

In 2012, the federal reserve cranked up the money printer again purchasing 85 Billion in monthly purchases of agency debt and mortgage backed securities.

Rates were already low, but the Federal Reserve reinstated QE4 and so on March 15th 2020 they agreed to begin purchasing 120 Billion dollars per month of agency debt and mortgage backed securities.

This quantitative easing and money spent does not include nearly 4.5 Trillion dollars spent in response to COVID.

It also does not include the yearly deficit spending from the US government.

It also does not factor in similar printing and quantitative easing from central banks across the world.

And so…

Stocks started trading at outrageous multiples…interest rates were reduced to near zero and many started taking out cheap loans.

The money was so cheap that banks started charging a negative interest rate just to keep your money at their bank for some large institutions.

Companies bought back their stock and borrowed money to buy back more.

After all, if you are borrowing for near 0% and are making 10% returns on your stock buybacks…why wouldn’t you?

This is why the last 15-30 years has been the golden age of passive investing.

Simply throw your money in an index fund and watch the market appreciate by a tidy 10% per year.

The companies of the world were staggering around in a drunken stupor of excess cash.

But those days are behind us.