More than two months have passed since the August “flash crash.” Fragilities illuminated during that bout of market turmoil still reverberate. Sure, global markets have rallied back strongly.
Getting “history right” has been a CBB focal point From Day One. In last week’s media barrage, Dr. Bernanke repeatedly stated that fiscal policy had turned contractionary – (or at best neutral) suggesting that fiscal stringency was a key factor in the Fed sticking with ultra-loose policies. In Friday’s WSJ op-ed, Blinder and Zandi write, “Policy makers who botched the regulatory job before the crisis and shifted to fiscal restraint prematurely in 2011.”
They were wrong.
When the Washington establishment believed THE Bubble had burst back in 2000/2001, the leading academic espousing inflationism was beckoned to Washington to provide cover for the Fed’s experimental post-tech Bubble reflationary measures.
This week provided further evidence that the bursting global Bubble has progressed to a critical juncture, afflicting Core markets and economies.
The Federal Reserve is flailing and global currency markets are in disarray.
The world’s leading central banks are facing the risk that their massive efforts to revive economic growth could be dragged down again, with some officials arguing for bold new ideas to counter the threat of slow growth for years to come.
Let’s this week begin with a cursory glance at the world through the eyes of the bulls.
I see discomforting confirmation that the current historic global monetary fiasco’s disaster phase is now unfolding.
The week commenced with yet another “flash crash.” The August 2015 version was notable for its ferocity and impressive global scope.
Contemporary global finance is a complex “system” of interwoven (electronic) “faith-based networks.” As the bursting of the global Bubble unfolds, myriad “financial dogmas” will be exposed as bogus.