Salient to Investors: David Stockman writes: Keynesian central banking has created a worldwide financial bubble. Soaring bond yields and the fear of losing debt market access are the one force that can cause governments to sober-up and acknowledge the facts. Reagan did not want Volcker to ease the intense upward pressure on interest rates and private
READ MORE... →Salient to Investors: David Stockman writes: The Fed has generated a $50 trillion financial bubble and made money and capital markets to little more than gambling casinos. Speculative rent-seeking in the financial market has replaced entrepreneurial innovation and supply side investment and productivity, resulting in a severe drop in real growth and a
READ MORE... →Salient to Investors: David Stockman writes: The ratio of finance to GDP has risen to 540% vs. the historic norm of 200%. Central bank driven bubble finance since the late 1980s has resulted in the GDP deflator-adjusted value of corporate equities and credit market debt outstanding rising 8 times, while real median household
READ MORE... →Salient to Investors: David Stockman writes: The financial carrying capacity of the developed market economies has deteriorated since the 1980s; due to aging demographics, declining competitiveness v. emerging market economies, declining productivity growth, and the big increase in the leverage ratio against public and private incomes. The US’s ability to
READ MORE... →Salient to Investors: David Stockman writes: This central bank fueled boom will ultimately bring a prolonged deflationary contraction and day of reckoning for financial assets. During the 27 years of Greenspan’s Fed Chair term from 1987-2014: The Fed balance sheet grew 23 times. Buffet’s net worth grew 35 times, or 19 times adjusted
READ MORE... →Salient to Investors: Martin Sandbu writes: The view that banks first accept deposits from savers before lending them to investors is wrong. The reverse is true – banks create deposits and credit them to their borrowers. Because of this, Cullen Roche argues that the quantity of central bank reserves does not
READ MORE... →Salient to Investors: Christine Lagarde at the IMF said: The Fed should delay any rise in interest rates until 2016 and wait for more tangible signs of wage or price inflation. Pockets of vulnerability in the US economy could cause serious trouble for the wider economy. The IMF predicts US growth of 2.5%
READ MORE... →Salient to Investors: David Stockman writes: Chris Rupkey at MUFG Union Bank says consumers have emerged from the winter blues and if they spend anywhere as great as they feel, the economy will roar over the next few months. Rupkey and others have been expecting a roaring economy for several years but are
READ MORE... →Salient to Investors: The median Wall Street forecast predicts the 10-yr T-yield to rise to 3.01% by the end of 2015, the 2-yr to rise more than double to 1.53%, and the 30-yr to rise to 3.70%. Wall Street calls for higher T-yields in 2015 are the most aggressive since 2009,
READ MORE... →Salient to Investors: The National Assn of State Budget Officers said: US states reduced taxes and fees this year by $2.3 billion, the deepest cut since F2001. By the close of 2014 state spending will be 9.4 % above the peaks reached before the full brunt of the recession. Just 12
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