… was the Great Depression chiefly the consequence of post-crash policy mistakes, as conventional thinking has come to profess? Or did the previous “Roaring Twenties” Bubble sow the seeds of a major down-cycle and collapse?
TSP & Vanguard Smart Investor Posts
Forgive my rant. But when I hear the Fed talk about their concern for inflation expectations, inequality, and now global warming it gets me going. It’s their way of avoiding the truth.
We won’t know all the crazy leverage and derivative strategies spawned during this period until the next big de-risking/deleveraging period
The New York Fed has now pumped out upwards of $3 trillion in a period of 63 days to unnamed trading houses on Wall Street to ease a liquidity crisis that has yet to be credibly explained.
What’s the battle of the TSP I fund about and mean to our investments?
From a conventional “financial stability” standpoint, this Credit cycle may appear virtually pristine. Yet Credit Bubbles survive only with unrelenting debt growth. Today’s mirage of “financial stability” depends on ongoing massive federal deficits coupled with aggressive monetary stimulus.
A financial smoke detector went off in the last month (I’m sure your financial adviser told you about it, right). The financial media provided many excuses like “who knew corporations would have to pay taxes like they do every year at this time surprising the bankers” (never mind they have the lowest tax rates ever).
First time all four developed countries have been negative year-over-year since last two global recessions.
It was no coincidence that U.S. “repo” market tumult followed on the heels of an abrupt reversal in global bond yields. I appreciate how the enormous global buildup in leveraged speculation works miraculously so long as bond yields are declining (bond prices rising). If only bond yields could fall forever – even as debt and deficits expand uncontrollably. It’s not clear to me how the global system doesn’t turn increasingly unstable, which I believe explains why the ECB and now the Fed have resorted again to QE.
This was the second strongest (22-week) monetary expansion in U.S. history, trailing only 2011’s “QE2” period…