Author Archives
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TSP Smart: “The numbers are just monstrous”
The numbers are just monstrous. The Fed’s own data illuminate the historic Monetary Disorder that today runs wild. In short, finance has completely run amuck, with the data corroborating the super cycle “end game” thesis.
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Doug Noland: Revisiting “Coin in the Fuse Box”
It’s reasonable to ask, “Where does it all end?” – with an equally reasonable answer, “with market dislocation and a crash”. All those Coins in the Fuse Box in 1929 contributed directly to the house collapsing in flames.
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Doug Noland: State-Directed Credit Splurge
With 2020 GDP estimates in the 2.0 to 3.0% range, the divergence between Chinese Credit and economic output is unprecedented. China’s “Terminal Phase” excess – including rapid acceleration of late-cycle loans of deteriorating quality – is unparalleled in terms of both degree and duration.
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Doug Noland: Summer of 2020
QE fundamentally changed finance. What commenced at the Federal Reserve with a post-mortgage finance Bubble, $1 TN Treasury buying operation morphed into open-ended purchases of Treasuries, MBS, corporate bonds and even corporate ETFs holding high-yield “junk” bonds. Markets assume it’s only a matter of time before the Federal Reserve adds equities to its buy list.
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Doug Noland: It’s About Jobs, Jobs, Jobs
Why is it reasonable to believe that monetary policy specifically aiming to inflate securities markets will somehow simultaneously ensure a corresponding modest increase in consumer prices? It’s not.
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Doug Noland: The Short History of Extreme Monetary Policy
“Consider the internet frenzy 20 years ago. Back then, large speculators, mostly hedge funds, were net short on S&P 500 futures in all but five weeks in 1998 and 1999. Those mostly losing bets were completely squeezed out in 2000. That’s when the crash came.”
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Smart Bird: Safe Haven Treasuries Not So Safe
Short-term Treasuries remain a safe investment. The TLT ETF mentioned by Doug has a long duration and its price moves 2% for each 0.1% move in interest rates. Interest rates popped a little this week sending bond prices down. And yes, inflation worries could be part of it.
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Doug Noland: Global Lender of Last Resort
It is a central tenet of Bubble Analysis that “things get crazy at the end of cycles.”
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The Federal Reserve: “It’s Not Our Fault”
…the safe havens signal a major crisis is unavoidable. This is not your granddad’s Economic Structure. And to hear the Federal Reserve still focused on below target inflation is a farce.
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Doug Noland: Crossing Red Lines
I seriously doubt China’s banking system inflates from $8 TN to $43 TN during this cycle without Trillions of “Bubble Dollars” flooding the world and its resulting reserves horde. U.S. crisis and QE1 provided China a blank check for a massive $600 billion 2009 stimulus plan. And Chinese Credit – along with investment, manufacturing, apartment Bubble, economic boom, technological advancement, military buildup, global influence peddling, and ambitions for superpower status – never looked back.