'..I’m content with the view that the “global leveraged speculating community” is one huge accident in the making.'<blockquote>'From my perspective, recent desperate measures from the BOJ, Fed and ECB put an exclamation mark on twenty years of failed monetary management. The view that this ends rather badly is confirmed by unrelenting bids for bunds, Treasuries and “safe haven” sovereign debt around the globe. It is further confirmed by the widening gulf emerging between highly inflated and speculative global securities markets and notably moribund (and increasingly stimulus-resistant) real economies.
Forecasting Bubble behavior is a tricky, tricky business. Yet I’ll stick with the view that Europe is the initial major crack in the “global government finance Bubble.” And while Draghi resuscitated “risk on” throughout Europe, this actually works to exacerbate fragilities as that region struggles with a deep and evolving crisis. I’ll stick with the view that five years of global financial excess has helped push China to the status of a crazy dangerous Bubble. And I see no reason to back away from the analysis that the emerging economies in general suffer from a dangerous Bubble mix of rampant Credit excess, problematic imbalances and deteriorating economic performance. Moreover, I’m content with the view that the “global leveraged speculating community” is one huge accident in the making.
Perhaps the crack in commodities markets is indicative of a confluence of unfolding faltering Bubble risk in Europe, China, the emerging markets and the hedge fund community. The Bank of Japan’s obtrusive market intervention provided a huge windfall for some while hammering others, not unlike recent obtrusive interventions by the ECB and Fed. All along the way, global risk markets become increasingly unstable - if not hopelessly dysfunctional. At this point, risks associated with repeated attempts to cure post-asset Bubble stagnation with “helicopter money” should not be all that difficult to discern.'
- Doug Noland,
Things Have Gone Too Far, April 12, 2013</blockquote>
Context<blockquote>
'The history of monetary fiascos .. to witness them in real time.'"For some reason, no-one seems to want to talk about how Korekiyo Takahashi's policies ended. Here's the rest of the story.... Eventually Japan went into war that ended in hyperinflation and total destruction of the Japanese economy. Praising the economic policies of Takahashi is quite a bit like praising the economic policies of Hitler. It's totally absurd."
-
Inspired By Economic Madness, April 12, 2013
'..avoiding a “secondary depression,” or for preventing the severity of one..' - Jesús Huerta de Soto</blockquote>