Why the Financial System Will Break: You Can’t “Normalize” Markets that Depend on Extreme Monetary Stimulus – 01.03.2018

 

  • Central banks are now trapped
  • In a nutshell, central banks are promising to “normalize” their monetary policy extremes in 2018. Nice, but there’s a problem: you can’t “normalize” markets that are now entirely dependent on extremes of monetary stimulus. Attempts to “normalize” will break the markets and the financial system.
  •  Let’s start with the core dynamic of the global economy and nosebleed-valuation markets: credit.
  • Modern finance has many complex moving parts, and this complexity masks its inner simplicity.
  • Let’s break down the core dynamics of the current financial system.
  • The Core Dynamic of the “Recovery” and Asset Bubbles: Credit
  • Credit is the foundation of the current financial system, for credit enables consumers to bring

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Source: oftwominds.com