An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
“Echoing Hyman Minsky and his financial instability hypothesis where stability eventually breeds too much risk-taking and financial crisis, Borio sad, “
The vulnerabilities that have built around the globe during the long period of unusually low interest rates have not gone away. High debt levels, in both domestic and foreign currency, are still there. And so are frothy valuations.
What’s more, the longer the risk-taking continues, the higher the underlying balance sheet exposures may become. Short-run calm comes at the expense of possible long-run turbulence.“
Chock full of metaphor.... doesn’t really say anything....
Sure prices will continue to increase because the rate increases also have a bullish effect via increased interest income from the higher rates... Franko
I'd say the ability of the government-privileged usury cartel to supply unlimited credit regardless of the price of it and George Soros' Reflexivity Theory is the more likely explanation.
They can’t supply unlimited credit they can only supply as determined by total system capital divided by 0.1.... its a finite and fixed number over short time intervals...
4 comments:
“Echoing Hyman Minsky and his financial instability hypothesis where stability eventually breeds too much risk-taking and financial crisis, Borio sad, “
The vulnerabilities that have built around the globe during the long period of unusually low interest rates have not gone away. High debt levels, in both domestic and foreign currency, are still there. And so are frothy valuations.
What’s more, the longer the risk-taking continues, the higher the underlying balance sheet exposures may become. Short-run calm comes at the expense of possible long-run turbulence.“
Chock full of metaphor.... doesn’t really say anything....
“Greenspan’s rate hikes continued for two years, through the 2005 peak in house prices and even after the yield curve had inverted in 2006.”
Sure prices will continue to increase because the rate increases also have a bullish effect via increased interest income from the higher rates...
Sure prices will continue to increase because the rate increases also have a bullish effect via increased interest income from the higher rates... Franko
I'd say the ability of the government-privileged usury cartel to supply unlimited credit regardless of the price of it and George Soros' Reflexivity Theory is the more likely explanation.
“to supply unlimited credit ”
They can’t supply unlimited credit they can only supply as determined by total system capital divided by 0.1.... its a finite and fixed number over short time intervals...
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