- 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