a Trump victory may cause stocks to decline 10% overnight. But when I discussed this at a recent dinner with Bill Dudley, president of the Federal Reserve Bank of New York, he said “it’s not our job” to prop up the stock market.
Jim Rickards reveals more juicy details about that private dinner with the head of the New York Fed.
The Shanghai Accord in its simplest form is a weaker dollar, a weaker dollar for imported inflation, a weaker dollar to stimulate U.S. exports (as noted previously here). It was a way for China to cheapen their currency without breaking the peg to the dollar.
Volatility is waiting to explode due to unstable currency exchange rates, bank liquidity crises, geopolitical uncertainty, and a wild U.S. election cycle.
For most experts, failure is a learning experience that leads to a search for new methods. That’s not true for central bankers. When their policies fail, they try more of the same in the vain hope that quantity will make up for the lack of quality in their ideas.
A collapse can happen at any time due to the scale, density and inherent instability of the financial system. The immediate cause of such a sudden loss of confidence is unknowable.
At the recent central banker conclave in Jackson Hole, Wyoming, the two most powerful central bankers in the world, Janet Yellen, chair of the U.S. Federal Reserve, and Mario Draghi, president of the European Central Bank (ECB), gave back-to-back addresses on the same subject.