As Grant notes, "it took a viral invasion to unmask the weakness of American finance."

Distortion in the cost of credit is the not-so-remote cause of the raging fires at which the Federal Reserve continues to train its gushing liquidity hoses; but, as Grant exclaims, the firemen are also the arsonists echoing his earlier in the week comments that:

Jay Powell's seemingly blinkered proclamation that "he sees no prospective consequences with regard the purchasing power of the dollar" as "very concerning" adding more pertinently that he thinks "that wilful ignorance is a clear-and-present-danger for creditors of The United States."

Grant continues:

It was the Fed's suppression of borrowing costs, and its predictable willingness to cut short Wall Street's occasional selling squalls, that compromised the U.S. economy's financial integrity.

The coronavirus pandemic would have called forth a dramatic response from the central bank in any case. Not even the most conservatively financed economy could long endure an official order to cease and desist commercial activity. But frail corporate balance sheets and overextended markets go far to explain the immensity of the interventions.