onsdag 8 augusti 2012

Marc Fabers senaste (31 juli)

Blandade fria citat:

Deeply disturbed by view that "policymakers eventually will do enough". it is keynesian, socialistic and totalitarian.

Allowing asset bubbles is the greatest mistake a central bank can make

Wrong with the US: current account deficit, savings collapse, household debts, lagging business fixed investments, trailing employment and income growth.

Greenspan: Bubbles impossible to identify
Richebächer: Highly visible symptom and cause of a bubble is erupting credit

Governments that encourage consumption prevents saving, i.e. promote unproductive consumption at expense of reproductive investment. The crucial distinction is between PRODUCTIVE CREDIT that finances investment and unproductive credit that finances consumption.

Credit excesses have stokes gross overconsumption, gross underinvestment and grossly inflated asset prices (hus, aktier, obligationer....)

Usually a recession is stabilized by increasing consumption (of cheaper products being liquidated). In 1930s consumption had already been artificially inflated before the recession and hence consumption fell in the recession for the first time, exacerbating the downturn.

WHY IS EASY MONETARY POLICY SUCH A SIN? Because when loans are cheap borrowers can finance every project they can dream up, resulting in short term excesses followed by a crash.

Regarding the Fed and ECB puts: The famous put has become the nightmare that drives what was once a market of decision makers (dvs jag som förvandlats till en vindflöjel).

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