How Bubble Finance Destroys Economic Efficiency and Rationality

The comments above & below is an edited and abridged synopsis of an article by David Stockman

We are in record territory; the market has had 395 trading days since it's had a 5% drop, and that has never happened before in recorded history.

The world's central banks had never dreamed of snatching $22 trillion of fiat credit from thin air prior to 1995, either. But in the 9 years since the financial crisis they generated $14 trillion of new footings, and more than $20 trillion during the last 3 bubble cycles combined.

This $20 trillion something-for-nothing has deformed and poisoned the entire global financial system. Financial asset prices have been massively inflated and falsified, causing a 2-phase distortion of the global economy.

Too much money printing in a globally linked central banking system leads to excess capacity, rampant malinvestment and, consequently, industrial and consumer disinflation, not inflation.

And the best start in history by the stock market is coupled with the worst start for the bond market. Bonds have had an abysmal start, with 10-year Treasuries posting their worst performance through January 19 in history as yields spike amid jitters on global demand and questions about what the growing deficit will mean for the Treasury's borrowing needs.