One wonders if the Fed would have sat at savings destroying zero percent interest rates for a decade or talk about going negative interest rates if they were suffering from their policies like pension funds and savers. Instead they are trading the tsunami of money printing like leverage hedge fund managers.
August Personal Consumption Expenditures (PCE) inflation rose to 4.3% y-o-y, the largest gain in 30 years. The S&P CoreLogic National Composite Home Price Index posted a 19.7% y-o-y gain in July – the strongest housing inflation in data back to… Read More ›
Stock Market Valuations at peaks. 2000 bubble: 210% of GDP, 2007 bubble: 188% of GDP, today: 332% of GDP
“The U.S. will not allow Mexico to collapse” – 1994. “The West will never allow Russia to collapse” – 1998. “Washington would never tolerate a housing bust” – 2007. “Beijing has everything under control and will do whatever it takes to sustain China’s boom” – 2021.
Forget the rules, this is unethical, corrupt and should be criminal. They should all resign, but this is the world of the top and this is normal to them.
The Federal Reserve helped leverage up the small cap stocks during the pandemic. Now the payback begins.
As is too often the case, conventional thinking is more wishful than wisdom. Inflation is very much alive, and it’s definitely not controlled by central banks. And, importantly, asset inflation and Bubbles pose momentous systemic risk to economic, financial and social stability.
“The people had just begun to jump when we got there,” Perkins later recalled.
Risks grow exponentially during the “Terminal Phase” of Bubble excess. I assumed Beijing would move decisively to rein in excess, particularly in lending and apartment speculation. But what is now unfolding goes way beyond measures to contain excess. China has begun a transitioning phase, with momentous yet uncertain consequences and ramifications. What began seemingly as a campaign to rein in apartment speculation and crack down on the big tech monopolies has speedily developed into something much more systemic and Draconian.
Larry Summers: Out of all the things you could spend the money on, the thing that it seems to me that would help the wealthy most and do the least to promote demand, is buying up financial assets. And that’s what QE is.