SNIPPITS ARE COMMENTARY ON CURRENT ISSUES.
There is an archive for every past month which you can explore.
The words could have been put together by someone that has been reading my Blogs and LinkedIn Discussions.
Perhaps that is what happened because the wording has striking similarities to what my readers have seen me write:
There is an archive for every past month which you can explore.
This warning to cease QE has come from the Institute of International Finance, (IIF), which according to this source, is a group of 450 of the world's leading banks:
http://www.globalpost.com/dispatch/news/afp/130307/global-bank-group-warns-over-too-much-liquidity-0?goback=%2Egde_45061_member_220983030The words could have been put together by someone that has been reading my Blogs and LinkedIn Discussions.
Perhaps that is what happened because the wording has striking similarities to what my readers have seen me write:
I have pointed out how rapidly mortgage costs can rise and property values and wealth invested in Bonds and Equities can can fall as interest rates revert to mean. The mean interest rate levels at which in a healthy economy where confidence is running high, the demand for money is held back by the cost of borrowing are far distant from their current levels; maybe around 7% for Mortgages, for example.
The longer this QE distortion, or the longer any distortion continues, the more damage it does, and in this case at least, the more damage it may do as it unwinds. This is the fear.
Basically, there is a race going on: will the stimulation raise profits and incomes far enough to bring down the ratio of asset prices / incomes back into line, or will the asset prices race further ahead instead?
If the latter, then when the QE stimulus slows down or fades away, and when interest rates rise again, we will be back to 2006 /7 but without the extra hazard of Sub-Prime.
The longer this QE distortion, or the longer any distortion continues, the more damage it does, and in this case at least, the more damage it may do as it unwinds. This is the fear.
Basically, there is a race going on: will the stimulation raise profits and incomes far enough to bring down the ratio of asset prices / incomes back into line, or will the asset prices race further ahead instead?
If the latter, then when the QE stimulus slows down or fades away, and when interest rates rise again, we will be back to 2006 /7 but without the extra hazard of Sub-Prime.
WHAT IS MISSING
What is missing is my alternative plan which readers can get some insight into from This Page of new financial products that are needed
and of course,
This Address which is the Home page of Macro-economic Design and lists the principles that are to be followed to make an economy easily managed.and of course,
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