2008: financial crisis
2009: lower interest rate to 0, CB buy financial assets
2016: financial assets inflated, massive gap between rich and poor, populism rise, trump gets elected
2018: interest rate rise, gap down in financial assets, real estate
2019: fill in the blank:
2009: lower interest rate to 0, CB buy financial assets
2016: financial assets inflated, massive gap between rich and poor, populism rise, trump gets elected
2018: interest rate rise, gap down in financial assets, real estate
2019: fill in the blank:
Option 1: real estate gaps down, equities gap down, corporate junk bonds gaps down, quantitative easing again begins.
Option 2: War. Ray Dalio argues we are in 1937, right before world war II. All the governments in the world are shifting populist, right, and nationalistic and have elected perceived strong leaders.
Option 3: Inflation. One could argue, central bank re lower interest rate, re initiate QE, in which case inflation can go spiraling like in the 1970s.
Option 4: Japan Staflation. After crash, go gdp rise, no inflation. Bank of U.S.A becomes like Bank of Japan and buys up to 20 to 30% of stock market propping up everything.
Option 5: Any other suggestions?
Option 6: Dollar denominated debt for Argentina and Turkey causes currency crises, dollar strengthens, then massively weakens due to selling of the debt in the market
Option 7: Helicopter money. You give money directly to the people. This in liberal circles is known as UBI. Universal Basic Income.
