Federal Reserve chair Jerome Powell was asked the GameStop and asset bubble question was asked at the end of Wednesday’s committee meeting:

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Since the introduction of the euro, officially measured consumer price inflation in Germany has not made any great leaps. It has averaged 1.5 percent per year. It reached its highest value in 2008 at 2.8 percent and its lowest value just one year later at only 0.2 percent. In 2020, it has been negative for certain months but was 0.4 percent for the entire year. Do these figures provide a representative picture of the general price trends?

“Threats to freedom of speech, writing, and action, though often trivial in isolation, are cumulative in their effect and, unless checked, lead to a general disrespect for the rights of the citizen.”

~ George Orwell

In early December I asked Jim Grant how to reconcile exuberant financial markets with economic reality that reads like dystopian fiction. He responded,

I’m not sure there’s much distinction. To me, the current form of dystopia is the bubble form. So I think this is the year of the dystopian bubble.

The investment world was convulsed last week when at least one hedge fund (Melvin Capital) lost billions of dollars. The sudden, massive losses happened when a tidal wave of independent individual investors, spearheaded by posts on Reddit.com, triggered a short squeeze that torpedoed the hedge fund.