At least for the time being the bulls are celebrating Janet Yellen’s “dovish” stance. Well, maybe they shouldn’t. At the end of the day the FED has nothing left in its arsenal. Just a bunch of empty words to propel our economy into financial abyss.

Negative interest rates, QE, currency wars, helicopter money, banning cash and Ferrari’s for everyone…….don’t make it laugh. He is a good summary on why none of that will work.

Central banks will never admit they’ve run out of ammunition, but they have

It is no good just telling people you have plenty of ammunition left in your arsenal. At a certain point, you actually need to say what it is, and explain how it will work.

And if you can’t? It might be better to say that central banks have done what is possible to stimulate their economies, and that it is now up to governments to do their bit, either with expansionary fiscal policy, or structural reforms, to make their economies more competitive. Sooner or later, they will work that out for themselves anyway — and they won’t thank you for lying to them.

I couldn’t agree more. Here is what the FED really did, at least in terms of today’s capital markets. The FED created a massive liquidity based valuation bubble and then proceeded to assure investors that everything will be fine. No matter the cost. A promise that they cannot possibly keep.

In other words, corporate earnings and the economy are decelerating at a fast clip while stocks remain incredibly expensive. It appears a bull trap of epic proportions has been put in place. Thanks Janet.