We all know the state of the financial world is far from good, just a few points: Government debt at unprecedented levels. Still at emergency easing levels 8 years later and we are still worried coming off that will crash the economy. Equity and bond markets pretty much rigged... it is seen as political taboo for them ever to drop. The whole world reliant on the state to always come to the rescue. Eurozone "experiment" seeming to be cracking. Rise of socialism.. Sanders in U.S Jeremy Corbyn in Uk Printed a sh*t ton of money and still virtually zero inflation. Thats just for starters, you can't talk to anyone in the markets that doesnt just shake their head and say "what a mess". BUT, humans love a scare story, we are always looking for a disaster. People have been calling for another 08 style crash since.. well 08. I think central bankers are morons for the most part. But you have to give them some respect they are highly educated people, its not in their interest to mess things up. My question is what is their theory behind all this? Is there anyway we can move forward and have a "normal" market and their plan work. Im not asking you to believe in it yourself. But im genuinely curious from an intellectual point of view what is their plan?
I think their plan is that eventually the economy recovers, and at that point, the quantitative easing by central banks can end.
that is the lucky part which exists in the moment. once inflation starts central bankers will not be able to control it.
if money printing were the cure Brazil and Argentina would be the richest countries in the world. don't be fooled by those who claim that QE is anything other than money printing. It will end badly because debasement of the currency always does.
I think most of us traders would like another 08 style crash as it will send volatility through the roof. But we dont want to kill the goose that lays the golden eggs. Another financial market crash and you know who will get the blame... us.. the "evil" speculators. Even though it has solely been caused by the government trying to intervene in markets and destroying free markets your average joe on the street doesnt understand this. Another crash and there will be more regulation, more banking controls, more governments taking over private companies. It wont be a good thing.
I don't think there is. In 2008, the amount of debt outstanding was much less than today... and debt always gets accounted for by somebody.
Which is kinda my point? Did they (govs'/central bankers) really go into this knowing that they were going to increase debt to a level that can never be paid back? Or is there a theory somewhere that it can work out? Maybe they were hoping for insane levels of inflation to erode the debt?
Chicago will be the first of a wave of bailouts by the Federal government and a crash of the currency.