Skip to comments.Inflation Target Regrets
Posted on 10/10/2018 12:28:58 PM PDT by george76
For years central banks had been keeping rates near 0%, or below, and at the same time printing over a hundred billion dollars worth of fiat currencies each and every month to purchase bonds and stocks. That is all changing now.
fourteen major global central banks are either in the process right now, or have indicated that they be will next year, in the process of raising interest rates. At the same time, QE on a global net basis will plunge from $180 billion per month at its peak during 2017, to $0 by December and will then go negative in 2019.
the notion that central banks saved the world by counterfeiting $14 trillion worth of new credit and by pushing interest rates to 0% and below for a decade is absurdly ridiculous. Rather, what they did end up creating was unprecedented and massive imbalances in the global economy, along with a humongous bubble in asset prices that exist worldwide. From which there is no escaping without devastating consequences.
there is a record $250 trillion of global debt that was issued in order to push up asset prices to unchartered valuations. And those asset price bubbles are completely dependent upon never-ending and ever-increasing central bank and government stimuli to remain in a bubble; or the entire artificial construct comes crashing down.
However, the inflation pump has been turned off this year and will go into reverse throughout next year. This change is not so much by choice but due to asset price levels and inflation rates that are at risk of becoming intractable if central banks did not act.
That is the trenchant difference from the past few years. It is going to be extremely painful for investors that are unprepared for this incredible change.
(Excerpt) Read more at finance.townhall.com ...
How is CALPERS doing?
How to go broke : Slowly at first, then all of a sudden.
The FED isn’t just raising rates, it’s also selling off assets, which leads to more tightening.
Dang, we just can’t seem to repeal the economic cycle of expansion and contraction. The only question left is how much things will swing toward or to the downside.
I was thinking right after the last raise that this is the third raise, has everyone forgotten the old saying about the FED, “three steps and a fall”?
The US Federal government spent $523 Billion on Debt Interest in Fiscal 2018.
Plus the states, locals, and ...
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