<blockquote>'The Fed has borrowed from future consumption more than ever before. It is the least data dependent Fed in history. This is is the longest deviation from historical norms in terms of Fed dovishness than I have ever seen in my career.'
- Druckenmiller (
Source, May 4, 2016)</blockquote>
'..the bubble inflated by former chair Ben Bernanke and current chairwoman Janet Yellen is many magnitudes worse..'<blockquote>'The U.S. debt is out of control, China is even worse and the worst offender is the Federal Reserve, Druckenmiller said. Corporations in the United States are stuck in the mud, forelorn of growth, unwilling to invest and addicted to share buybacks to gin up their stocks. It is a sentiment Druckenmiller has had for years, but at the Sohn conference the famed hedge fund manager indicated he means it this time.
Eleven years ago, Druckenmiller warned the Sohn audience of then Federal Reserve chair Alan Greenspan’s blunders in inflating an epic mortgage bubble that was sure to crash. On Wednesday, he said the bubble inflated by former chair Ben Bernanke and current chairwoman Janet Yellen is many magnitudes worse. The Fed, Druckenmiller said, is using low interest rates to ease borrowing costs and smooth over problems in the global economy.
This radical Central Bank accommodation is leading to unproductive investment, and is an issue that is even worse in China, an engine of global demand. Whether it is S&P 500 Index corporations, U.S. households or the state-managed economy in China, Druckenmiller believes cheap money is borrowing from future growth, and will backfire spectacularly.'
-
Source, May 4, 2016</blockquote>
'Bottom line: question everything relating to the economy in China right now..'<blockquote>'The Chinese are desperate to maintain the illusion of 6.7 percent growth, quarter in, quarter out. Maintaining that illusion has become harder and harder as questioning of the consistency of various data sources has become more insistent. Shutting off the flow of sector/industry/product data is a brute force way of dealing with that problem.
This is another signal of the real state of the Chinese economy. The government wouldn’t have jacked up the stimulus unless the true state of affairs was far more dire than official statistics suggest. The government wouldn’t be suppressing data from the primary goods sectors unless it was also giving the lie to the official line.
Bottom line: question everything relating to the economy in China right now. Be especially skeptical about anything done under the banner of fighting corruption. That banner should be a red flag warning that the Chinese Communist Party is trying to suppress inconvenient people, or inconvenient truths. If they say it’s about corruption, it’s really about something else.'
- Streefwise Professor,
If You Believe the Official Reason for Cutting Off Chinese Economic Statistics, I Have a Great Wall to Sell You, May 5, 2016</blockquote>
Context Mises - Money and Credit - '..the recession was a problem of under-saving, and over-consumption..'<blockquote>
China Warns Economists, Analysts, Reporters About “Overly bearish” Remarks, May 3, 2016
It’s the Debt, Stupid! May 5, 2016
'..few individuals (if any), irrespective of their investment expertise, would be in a position to achieve a 4.5% rate of return on average from age 18 to death.'
-
Source, May 5, 2016
'China has an historic Credit problem..''..the Great Depression .. was caused – like our crisis today – by too much debt.'The Great Deluder - By Kurt Richebächer(Banking Reform - Monetary Reform) - '..The Theory of Money and Credit .. an invaluable guide for ending the business cycles of our own time.'</blockquote>