We currently have asset bubbles driven by loose, overly plentiful, and cheap credit in housing, commercial real estate, stocks, bonds, and of course, bitcoin. When one of these starts to deflate, it will start a chain reaction that destabilizes the financial system. I believe that's where we're headed, although it's probably at least a year to 18 months away... I read Yellen's thoughts here as the Fed itself being panicked, but somehow hoping to manage a soft landing by downplaying just how bad the problem is.


She's doing the right thing by reducing the size of the Fed's balance sheet and taking excess money out of the system. But it will cause the asset bubbles that the Fed created with QE to deflate. The Fed has decided that it is quite willing to have you pay that price.  It is incumbent on you to recognize that and take the appropriate defensive action.''

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