Market “fixes” fuel wealth/income inequality which feeds political and social instability.
There are two Grand Narratives about the U.S. economy and asset markets: the mainstream narrative is that nothing is fundamentally wrong with the economy, and so no structural changes (and the sacrifices such changes entail) are needed.
In this narrative, the only problem that needs solving is markets stop bubbling higher. The mainstream always expects markets to keep bubbling higher essentially forever, but reality intrudes and the asset bubbles pop.
The solution in this narrative is to “fix” markets with massive stimulus: fiscal stimulus from the Savior State and monetary stimulus from the central bank — Federal Reserve (reinflating bubbles that enrich the already-wealthy is our primary job).
I’ve marked up a chart of the S&P 500 stock index to reflect this narrative:
Read more at:Are You Prepared to Invest in Troubled Times?