You give the Fed way too much power. They don't have that sort of omnipotence. If they did, they wouldn't let 2008 happen.
What they are doing with cheap money is sawing the seeds for an even bigger day of reckoning in the future. The free market will eventually overwhelm them.
What they are doing with cheap money is sawing the seeds for an even bigger day of reckoning in the future. The free market will eventually overwhelm them.
https://twitter.com/moseskagan/status/1337239145463214080
Back in 2007, they had some level of interest rates to cut, and they had ways to go experimenting with other toolbox options, including:
• future guidance
• additional QE
• inflation targeting
Now, governments & CBs they have just about shot all the bullets they can shoot.
• future guidance
• additional QE
• inflation targeting
Now, governments & CBs they have just about shot all the bullets they can shoot.
After 13 years of experimental monetary/fiscal policies — since 2007 — market participants are convinced central banks and governments exercise full control over business cycles, debt levels, and asset prices.
The view today is, they have your back. What could possibly go wrong?
The view today is, they have your back. What could possibly go wrong?
So, asking whether the Fed will ever allow that kind of cycle again?
My view: it isn't up to the Fed to allow or not allow it.
Instead, an even worse crisis will surely happen because of what the Fed has created, albeit my opinion is in an extreme minority.
My view: it isn't up to the Fed to allow or not allow it.
Instead, an even worse crisis will surely happen because of what the Fed has created, albeit my opinion is in an extreme minority.
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