The US National Debt surpassed USD $20 trillion this week, and the Fed, being the largest holder of that debt, as created for itself a peculiar credibility short position, in that it must constantly apprise the market of it's stance. Failing which, the market participants cannot position themselves, and so will have to factor in duration risk, something the Fed cannot afford to allow to happen, as it will loose billions dollars if uncertainly is allowed to creep in.
So the market is effectively blinkered, and is incapable of pricing world risk appropriately, as the Fed. (and the ECB - working in tandem) constantly announces what it intends to do. Almost daily!
Seeing that it is Centralist Policy to involve the Fed. in policy that it has no natural free role in, what is your solution to this massive international problem?
In other words, is the VIX adequately priced? Or should it be forced lower, or allowed to find it's Centralist long term value?
This impacts you dearest heart, for both the Aussie and the New Zealand dollar are massively over-traded, and their value is largely a construct of the USA's rather interventionist socialist policy.
What happens when this fails, and Australians & Kiwis union workers lose their jobs, that are currently supported thereon?
How and who do the Critical Theorists blame, when it is their interventionist belief that has largely created the structure for this enormous fragility?
