Once again the Fed has built up the illusion of economic prosperity on a mountain of debt, fueled by monetary steroids that have inflated asset values way beyond their sustainable level. As markets begin to slide, this wealth is now being eviscerated as quickly as it was created, and it threatens this increasingly anaemic and very aged recovery.

My back of the envelope calculations (OK, I used a calculator) suggest that without the fall in the SR through 2017,  the 2.3% GDP growth recorded for 2017 would have been only 1.5%, the same as 2016. The risk is now, with the tide going out on the equity market that the SR jumps higher, growth flounders, and the iceberg of debt rips open the hull of this supposedly unsinkable economic ship. If you want to blame someone, blame the Fed. And I am sure that is exactly what President Trump will do when he loses patience and moves to remove their independent status.

This data merely reflects the illusion of prosperity. The markets are now sniffing out a rising stench from decaying debt. They say a fish rots from the head down. Unlike the 2008 financial crisis, this time I expect it is the Fed that will be held responsible for yet another debt crisis. Do not expect their independence to survive.