<Blockquote>'..we’ve learned well enough that central banks are blind to the risks of speculative bubbles, and are perfectly willing to sacrifice long-term economic stability in pursuit of reckless and empirically baseless theories. We won’t get in the way again, and the fact that value-conscious investors have learned not to do so - that they have been
forced not to do so - is to concede tragedy for the financial markets in the longer-run. Meanwhile, we’ll carefully walk the paths that emerge.
Across the pond in London, my friend Albert Edwards at Societe General notes the increase in political extremism, including the extreme right-wing Alternative for Germany party, and observes that much of this shift can be linked to economic policies that focus on nothing but debt expansion and financial-market distortion. “Quick-fix monetary QE nonsense has made virtually no difference to the economic recoveries other than to inflate asset prices, make the rich richer, inequality worse and make Joe and Joanna Sixpack want to scream in rage. They are doing so by rejecting the establishment political parties and candidates at almost every electoral turn and seeking out more extreme alternatives at both ends of the political spectrum. I have not one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions, and that political chaos will be the ugly result.”
I have to agree. This wouldn’t be the first time in history, nor even in the past century, that inept economic policy, class divisions, and growing nationalism led humanity to choose leaders that seduced them to abandon the better angels of their nature.'
- John P. Hussman, Ph.D.,
Lessons From The Iron Law of Equilibrium, April 25, 2016</blockquote>
Context<blockquote>
'..since 2007 .. total Chinese bank assets have inflated from about $7.0 TN to over $30 TN..''..sold as temporary extraordinary measures is increasingly recognized as desperate “whatever it takes” indefinitely.'</blockquote>