Here come the pitch forks

Doomberg recently ran several pieces on insider trading and inappropriate behavior at the Fed, one on chairman Jerome Powell’s plummeting chances of re-election, and another on Robert Kaplan’s spectacular greed, and the rampant corruption in the political class (from Pelosi and Feinstein to Loeffler and Purdue).

Here’s an excerpt from Let Them Eat Pizza:

“Not satisfied with mere good fortune, America’s elite are indulging in an orgy of staggering self-enrichment, the scale of which would make even Bacchus blush. As the embers of disgust take hold, one wonders how long until a full-on fire rages from below to spoil the party.”

While many of us (myself included) have been warning of a coming crisis triggered by monetary excesses for well over a year, until very recently both the media and the political class have covered for the Fed, the Biden administration, and officials engaging in totally irresponsible policies and behavior (and making millions), while the SEC has viciously targeted the lower and middle classes for small offenses (or even just questioning the status quo. Michael Burry’s office was purportedly visited by the SEC for warning of a coming inflation wave).

That may be changing. In a Senate Banking Committee meeting on September 28th, senators grilled Chairman Powell on ethics, inflation, and financial regulation.

For a long while, nobody bothered to speak up, content with their spectacular financial gains in the midst of a pandemic killing millions of people worldwide and shutting down entire economies. A year and change later? The rich are a lot richer, but real wages are the lowest they’ve been since the 2008 financial crisis.

Consider this comment from a teacher and social worker in Illinois:

My neighbors have had to make impossible decisions. They’ve had to choose between paying for their medications or putting food on the table, between child care for their kids and rent. My community faces so many critical challenges and we actually have a shot to fix some.

As even rank and file liberal normies start waking up and realizing that despite the most accommodative monetary and fiscal policy in world history, and a Democrat  executive and legislative branch, they are weighing which essential purchases to make, you better believe that they will begin turning on and eating their own. From Fed governors to Senators, as the inflation monster continues to grow, smart political operators will be looking for someone else to blame so that they too don’t end up in the guillotine.

For now, the political machine has kept to only sacrificing peasants and outsiders like Keith Gill, Michael Burry, and a number of small fries found to be guilty of minor violations - or even just to have had the gall to profit from very public, very correct calls that undermine the establishment consensus.

I think economic pressures - mostly due to inflationary and supply chain pressures - will drive political instability and rebalancing like we’ve never seen - and even the most liberal politicians will suddenly start talking like sound money folks.