Having previously warned that The Fed's "fixation with the markets has created a deadly trap," and recently noted that "Central Banking has lost its way," Stephen Roach unleashed a few minutes of painfully honest truthiness on an unsuspecting Kelly Evans at CNBC. The brief interview reiterates Roach's previous comments, as Tim Iacono notes, that "it didn't have to be this way." The Fed "is in total denial," Roach rants, adding that it "hasn't learned the lessons of what it put the world through a decade ago."

Roach in 2005 (via Morgan Stanley):

"It didn’t have to be this way. The big mistake, in my view, came when the Fed condoned the equity bubble in the late 1990s.

It has been playing post-bubble defense ever since, fostering an unusually low real interest rate climate that has led to one bubble after another.

And that has given rise to the real monster -- the asset-dependent American consumer and a co-dependent global economy that can’t live without excess US consumption.

The real test was always the exit strategy."