When old grandpa Demographus entered the room and started speaking of changing trends in business, with more workers retiring and best clients spending less, attention got dispersed. Distraction and entertainment were provided by granny Yellen. The white-haired and mild-mannered lady galvanized all the attention with some prodigal fairy tales.

Her stories took place in a land once outlined by mountains and valleys, until two mighty wizards exercised their power on it. One wizard was trusted to watch over the east and the rising sun, while the other watched over the west and the setting sun. Together, BOJ and FED used their magic to fill up the valley where their kingdom was found. By doing so, they had lifted those lowlands onto an enchanted plateau!

When some skeptics questioned what lies in wait at the end of such plateau, wizards and followers replied in a chorus that another rising slope would eventually lead to higher and more fertile grounds. Many seemed mystically appeased by that seductive idea.

But, amidst those marveled ones and a chronically distracted crowd, blessed by either ignorance or indifference, a stubborn bunch insisted on some preposterous and petulant incredulity: "Yet, at the end of such higher fields, wouldn't there be any precipice? Aren't the valleys a natural and necessary part of the landscape? Don't lowlands become more fertile too, since precipitation gathers nutrients that allow for more robust growth and richer harvests in the future? Or would the sky be the ultimate limit from now on? With ever higher altitudes, at what level would the sunshine provide no further warmth or nourishment for the villagers?"

Many were apparently blind to the increasingly fragile state of the vegetation around them, with fewer and shorter roots grasping in those higher and drier grounds.

The thinning air of such heights had already affected whatever judgment and ability to reason was left in the kingdom of Dowjonesy...

The original scenery of my parable could have looked like this:

(the relationship exposed in the chart above was brought to my attention by Harry S. Dent Jr.)

But, while the monetary magic of money being pulled out of hats may continue to entertain the economy, any due valleys and troughs will be postponed in favor of ever frothier altitudes...

The chart below shows all assets accumulated by the FED through its money-printing programs of quantitative easing superposed by the coincident trajectory of the S&P500.

"And that I see, in passages of proof, (...) a kind of wick or snuff that will abate it; (...)
for goodness, growing to a plurisy, dies in his own too much." (Hamlet, act IV, scene VII)

The stock market encourages civil and democratic engagement!

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