No place for beginners or sensitive hearts
Sentiment is left to chance
No place to be ending but somewhere to start
--Sade
Nice assessment of inflation vs deflation risks offered, I suspect, by Mr P. He suggests our fate depends on gov't, particularly w.r.t. the Fed.
While many believe that monetizing till kingdom come is a layup, Mr P seems to think that undershooting is more likely. Me too.
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Whilst it is true that from peak to trough, private-sector debt in the US contracted by roughly US$800 billion, this debt reduction was overwhelmed by the US government’s debt accumulation efforts.
Over the past two years, US federal debt has surged by a whopping US$3 trillion, thereby more than offsetting the deflationary impact of private sector deleveraging.
Total debt in the US is now at a record high!
~Puru Saxena
Money velocity may be a metric to monitor as corporations and banks are holding a large amount of cash and reserves, but don't appear to have the desire to deploy in the current environment.
What happens to total credit stats if they are adjusted for nonperforming loans and their underlying assets that have not been marked to mkt?
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