Sitting on the Razor's Edge - Mind your assets!

Here's a picture. It tells the whole story. Never mind CNBC. Never mind Bloomberg. Never mind Fox Business.

Look at this picture. Understand it. This is the predicament of the Federal Reserve, and all it affects all of us. Globally.

The Fed, and the markets, are caught in an impossible loop. It's a staring contest - markets are watching the Fed, and the Fed is watching the markets. If the Fed threatens rate hikes, the markets swoon, the Fed then panics and backs off and the markets soar. Rinse and repeat. In the meantime, savers and pensioners earn nothing on their cash, while businesses and governments pile up more debt. And so, the house of cards piles ever higher.

Like any staring contest, someone will blink. Once they blink, the system begins to falter - and 2008 looks like a quaint prologue to a larger tragedy.

Let's support each other. Let's be prepared, with our eyes wide open.