Big Picture View of the Brewing World Financial Crack-up
gulfcoastcommentary.substack.com
The legacy of zero interest rates for 7 years has already planted the seeds of our next financial crisis. Super low interest rates, various QEs and China have inflated bubbles in equities, bonds, and housing since the 2008/2009 bust. (After the great recession, it was China and the largest debt-fueled spending binge in history that "saved" the world -- something that can't happen again.). Housing prices are now much higher than the 2007 peak and rents have sky-rocketed. Oh and add the bubbles in subprime auto loans, subprime student loans and the related tuition inflation. But the bubbles are starting to burst as the tide of liquidity has been ebbing all year -- and even before Yellen decided to raise the Fed Funds rate this week.
Big Picture View of the Brewing World Financial Crack-up
Big Picture View of the Brewing World…
Big Picture View of the Brewing World Financial Crack-up
The legacy of zero interest rates for 7 years has already planted the seeds of our next financial crisis. Super low interest rates, various QEs and China have inflated bubbles in equities, bonds, and housing since the 2008/2009 bust. (After the great recession, it was China and the largest debt-fueled spending binge in history that "saved" the world -- something that can't happen again.). Housing prices are now much higher than the 2007 peak and rents have sky-rocketed. Oh and add the bubbles in subprime auto loans, subprime student loans and the related tuition inflation. But the bubbles are starting to burst as the tide of liquidity has been ebbing all year -- and even before Yellen decided to raise the Fed Funds rate this week.