The Everything Bubble in Reverse
Where has all the money gone? The function of quantitative tightening in narrative economy.
OK, the basic narrative of the abysmal, appalling market of 2022 is something like:
‘This time round, the money printing has gone too far. The FED, ECB and other central banks printed trillions, then bought the markets and subsidized people.
This put a floor under the markets when it was most needed as the pandemic unfolded in 2020, but then they kept buying even as the economy strengthened, flushing the markets with cash ad infinitum.
Money eventually seeped into all corners of the economy, from mounting house prices to meme trading and just plain gambling with money on anything that had a meme potential or was hard to understand.
And! Inflation.
The central bankers had to admit defeat, stop calling the inflation transitory and begin tightening. The markets are bleeding because, you know, the free money is gone.’
Is it?