And with the amount of debt in the West, including a tsunami of junk junk bonds, they risk a fail unseen before. I don't think the Fed or ECB (certainly not the BOJ) can tighten. The BOJ is effectively paying the bills direct for the Japanese government ($US60 billion per month), and pricing Japanese government bonds. It's a disaster.
There is a classic scene in a bad movie (I think it's one of the Tremors movies) where the protagonists are running from a bomb. After several calls of" It's going to be big" by one character, another retorts with: "Yes, but is it gonna be today?"
This is the way I feel about this whole thing. To give away my age, I hit University pretty much right as the dot com crash hit. In response to that the Fed dropped interest rates to their "lowest level ever", a line that would be repeated pretty much every year since.
So for my entire adult life, I have been reading about easy money causing the downfall of the west, the depression to end all depressions. I honestly thought 2007 was it. But no, all we got was another round of "lowest/highest level ever" and on we march.
I'm not disagreeing with the assessment that this is ultimately unsustainable, but for something doomed to fail imminently, it's been shambling along for an awfully long time.
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And with the amount of debt in the West, including a tsunami of junk junk bonds, they risk a fail unseen before. I don't think the Fed or ECB (certainly not the BOJ) can tighten. The BOJ is effectively paying the bills direct for the Japanese government ($US60 billion per month), and pricing Japanese government bonds. It's a disaster.
There is a classic scene in a bad movie (I think it's one of the Tremors movies) where the protagonists are running from a bomb. After several calls of" It's going to be big" by one character, another retorts with: "Yes, but is it gonna be today?"
This is the way I feel about this whole thing. To give away my age, I hit University pretty much right as the dot com crash hit. In response to that the Fed dropped interest rates to their "lowest level ever", a line that would be repeated pretty much every year since.
So for my entire adult life, I have been reading about easy money causing the downfall of the west, the depression to end all depressions. I honestly thought 2007 was it. But no, all we got was another round of "lowest/highest level ever" and on we march.
I'm not disagreeing with the assessment that this is ultimately unsustainable, but for something doomed to fail imminently, it's been shambling along for an awfully long time.
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