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Thursday, March 28, 2024

Comment by The Nattering Naybob

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  1. The Nattering Naybob

    Phil – And one last thing, let me expand upon Grant, viz. the price of loan funds and the self reinforcing distortions it can create. Just think about the bond float (QE) and the affect central bank buying has had on price and yield (NIRP, ZIRP).  

    Then add another layer on this central bankers shitcake…  the diversion and perversion of capital – misallocation due to the disintermediation created by all these artificial ingredients QE, IOER, ZIRP, NIRP.  How so?

    Had normal price discovery and liquidity preference been in effect, and had lending by the banks not been discouraged by squeezed NIM's and those very liquidity preferences, along with lowered demand for those funds, would that money be sequestered in a massive bond, equity and RE bubble?

    Or would it be actually working towards economic production or real GDP growth?  No need for an econo moron, because a child or anyone with their wits about them can answer that one. When true price discovery is obscured, one can count on this…

    What would normally be an accurate econometric or market signal, has been corrupted, so its bad data.   We all know what happens to control when field data is not accurate, GIGO viz. like the stock monkey revising projections with his darts, CPI inflation, GDP growth, all of it, not worth the paper its printed on. So how in the hell do you steer the ship with blinders on?

    Nobody can guide or control anything in this world with faulty instrumentation readings. In this case, we can blame falsity: in economic doctrine, econometrics and MSM happy daze narrative designed to "anchor the expectations" of the unsuspecting electorate and populace.  The blind leading the blind, or Helen Keller would be a better and trustworthy Fed head than any we have had.  

    At the end of the day, there is something more than natural in this. This witches brew created liquidity preferences which reward non GDP investment vs real GDP investment.  In effect encouraging economically and socially detrimental behavior in individuals, institutions and markets.

    Now that's what we call distortion in a signal and worshiping false profits as a result.  But if you want to believe, it's Saul Goodman, the ice in my IV is melting and Out.



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