Thursday, July 07, 2016

Central Banks Flail 
As Risks Were Never Higher
Danielle Park highlights the recent moves by central banks responding to falling global economic growth & rising financial stress - with more misguided policy easing aimed at prompting banks to lend more to households that are already drowning in debt .. "Central bankers only ever had this one idea, and they have flogged it this cycle to sub-zero. The global financial system is already brimming with debts that cannot be repaid, but the wizards of Oz keep hoping to add some more. Willfully blind, we should not expect admission or repentance–at least until after they leave office (or are thrown out). Future yields tell us about market expectations for economic growth. And with nearly $12 trillion in bonds now yielding less than zero (ie, lenders paying borrowers to take loans) across much of the developed world for terms out to 10 years, government bond markets are forecasting recession as far as the eye can see."
LINK HERE to the commentary

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