Hedge Fund CIO: Jerome Is Unlikely To Be Around For When Everything Comes Crashing Down

By Eric Peters, CIO of One River Asset Management

“Starship SN10 landed in one piece!” tweeted Elon, his magnificent rocket having returned in one piece, gently set down, a Goldilocks landing. And no sooner had the world’s most inspiring risk taker tweeted in celebration then a methane leak set off a chain reaction, a devastating explosion, an awesome fireball eclipsed only by Musk’s ambition. The starship was sent careening through the air, crashing back, obliterated – RUD in Musk parlance (Rapid Unplanned Disassembly).

“RIP SN10, honorable discharge,” he tweeted minutes later, moving on, inspiring entrepreneurs across the globe to boldly pursue their dreams, undeterred by the longest of odds. Stress-testing their creations. Pursuing anti-fragility through the embrace of volatility.

“We think our current policy stance is appropriate,” said Fed Chairman Powell nervously, a scent of methane in the air, Treasury yields surging, repo rates jumping to 4.25%, credit ETFs trading at discounts to their net asset values. “If we do see what we believe is likely a transitory increase in inflation, where longer-term inflation expectations are broadly stable, I expect we will be patient about making any changes to policy,” added Powell, without articulating the rising risks of systemwide RUD should longer-term inflation expectations start broadly rising.

But Jerome is unlikely to be around for that stage. He will have passed the greatest experiment in monetary history to a successor.

And lost in the transition from one Chairman to another is the objective of the mission itself.

Because you see, today’s monetary magicians do only one thing; pull future prosperity to the present. They produce nothing. For that we rely on entrepreneurs, who take calculated risk in pursuit of material progress. And we pray they improve our prospects faster than bankers pull them to the present.

“Tests are about improving our understanding and development of a fully reusable transportation system,” explained SpaceX. “One that is designed to carry both crew and cargo on long-duration interplanetary flights, and help humanity return to the Moon, and travel to Mars and beyond.”

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