Mish mocks fed but misses something HUGE

In this post Mish mocks the notion of excess reserves and quotes really smart guy John Hussman.  Go read it if your time isn't very important to you. No, really.  If you have nothing better to do than read essentially unactionable facts, that article is for you. 

But if you really want to know something worth knowing, check out the chart below.  Until the global financial crisis kicked off, there were no excess reserves.  So they pumped the system full of liquidity in the form of excess reserves but have been trying to pull it back out of the system since 2014.  They thought they were going to be able to pull off the bandaid and find that the system has healed due to their fucking meddling in the free markets.

Well I hate to everyone but this chart is Elliott wave 101.  We had 5 perfect waves up into blue 1 and now a textbook a-b-c back down to the level of the prior 4th into blue 2.  I don't have to know anything about anything except for what this chart means, and it means that within the red circle big major major problems are going to pop up in the financial system.  I think we are seeing the cracks form right now in the form of an other liquidity crisis.  But this one will be even bigger and come upon us even more quickly than the last one.  The bay will get sucked dry and idiots will run down there to pick up shells meanwhile the tsunami of economic failures heads straight at them.

The fed will responds with more excess reserves, faster.  They have no choice.  This is the only way to kick the can down the road.  But the fed and all the other central bankers are out of gas and so I don't think they have the ability to kick the can much longer.