The Fed's Empire of Speculation and the Echoes of 1929

Speculation has its own expiration dynamics, and they don't depend on us recognizing speculative excess for what it is.

The Federal Reserve has so completely normalized speculative excess that these extremes are no longer even recognized as extremes. Rather, they are simply "the way the world works." This Empire of Speculation is complex and plays out on multiple levels.

The primary mechanism is obvious to all: whenever the equity market falters, the Fed unleashes a flood…