Monday, October 25, 2010

Grand Strategy?

This article smacks a bit of paranoid conspiracy, insisting the power elite have a "plan" rather than what is more likely a high finance/bought politicians tragedy of the commons. He also hasn't noticed that most of this crash was exactly about markets' ineptitude at price discovery . . . but there was this blurb:

Trade of the Decade
7. The flood of global quantitative easing/liquidity/credit has flowed into risk-assets as zero-interest rate policies (ZIRP) have created a mad rush for yield.Rather than create new borrowing and spending in the real economy, as the Fed claims was the intention of its policies, the trillions of dollars, euros, yuan, etc. have flowed into emerging markets (many of which are up fantastic percentages in the past few years), commodities, corporate debt (which as surged to $7 trillion in the U.S.), Chinese real estate and developed-nation's equity markets.
This has created global bubbles in a variety of asset classes.
Why this isn't obvious to more analysts I don't know. 

No comments: