'..since 2009, global central bankers have embraced extreme monetization and rate measures specifically to target rapid Credit expansion and securities market inflation..'<blockquote>'Let’s try to put things into context: We’ve witnessed history’s greatest financial Bubble. The Bubble has been fueled by a confluence of extraordinary financial innovation (i.e. securitized finance, leveraged speculation, derivatives, state-directed finance, etc.), unmatched debt growth, unprecedented central bank Credit expansion and market manipulation - and the global adoption of all of the above. Especially since 2009, global central bankers have embraced extreme monetization and rate measures specifically to target rapid Credit expansion and securities market inflation.
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..China has completely lost control of its Credit Bubble.
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It’s surprising that China’s move to target 13% broad Credit growth (“total social financing”) didn’t garner more attention. Not only would this see Credit expansion likely more than double the rate of GDP growth, it would could amount to upwards of an astounding $3 Trillion of new system Credit.
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The Chinese are playing a very dangerous game. Peg (highly suspect) Credit growth at about $3 TN, peg (highly imbalanced) economic expansion at about 6.5% and peg their (now highly suspect) currency versus the dollar. This amounts to truly epic financial and economic impairment. And, importantly, this predicament has become rather conspicuous. Waning confidence in policymaking is fundamental to my bursting global Bubble thesis.
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..the bottom line is that central bankers have had to resort to only more obvious desperate measures, while the Chinese have succumbed to lunacy. It’s all anything but confidence inspiring.'
- Doug Noland,
Thesis Update, March 12, 2016</blockquote>
Context<blockquote>
'..the Great Depression .. was caused – like our crisis today – by too much debt.''..the global economy straining under a record pile of debt..'</blockquote>