Peter St. Onge

Once you understand that the Fed is creating these things and then you understand exactly the mechanisms, interest rates and liquidity, in other words, dumping money in, then it becomes a lot easier to spot the recession coming.

Yeah, you're absolutely right.

And so there's a name for that.

It's called the Fed put.

Right.

Which is the idea that whenever stuff goes down, the Fed's going to step in and make it all better.

And that has really I think Greenspan is really credited with that.

So that was the early 90s.

And the Fed, you know, traditionally was supposed to be an umpire, like a referee.

And what Greenspan turned the Fed into was really a bailout machine, like a permanent bailout machine for everybody.

You didn't even ask for it.

You know, the Fed would see some problem coming down the pike.

They would see like short-term rates spike and they would like pre-bail out everybody.

In the 2008 crisis, well, that contributed to the 2008 crisis, right?

Because if it's essentially running a casino where if gamblers win, they can take it home.

If they lose, the house is gonna cover them.

Right, so the first night you do that, there's gonna be a lot of happy people.

If you do that for five years, you're gonna have a really, really big casino and you're gonna have a lot of money going out the door.

And that's exactly what happened with the Fed.

So we saw that in the 2008 crisis, where what really set it off was that, I think it was Lehman, Bear Stearns and then Lehman.