Path of Addiction

You see the signs
But you can't read
You're running at
A different speed
--Robert Palmer

We have employed the addiction analogy many times on these pages to describe our unbreakable habits of borrowing and spending. The theme surfaced again this week as onlookers described the Fed's inability to cut back ('taper') its stimulative bond buying known as quantitative easing (QE).

Stan Druckenmiller laments the Fed's 'no taper' decision, observing that the central bank could have initiated the process to get us "off the dope." Others, of course, believe that the Fed could not cut back if it wanted to and has effectively trapped itself in a corner.

Parenthetically, Druckenmiller also observes that the Fed's decision not to taper is "fantastic for every rich person" and thinks that this monetary stimulus program amounts to "the biggest redistribution of wealth from the middle class and poor to the rich ever." This is a point these pages have made many times as well.

David Stockman thinks that "we're stumbling into the endgame" as Ben Bernanke hands the baton to (presumably) current Fed vice chair Janet Yellen. Yellen "has no clue how to wean Wall Street from its pathetic addiction to easy money."

The addiction is not just Wall Street's, of course.

There are only two paths for the addict: pull back and kick the habit, or escalate and crash.

Which path is ours?