I was wrong. The great Credit Expansion Finished didn’t end with the financial crisis; the great Credit Expansion merely took a reprieve. While the effects of the reprieve were mighty indeed, with stock and bond prices plunging, I was wrong to believe Credit Expansion Finished. Total credit (debt) has now soared to new highs largely taking stock and bond prices right back up with it.
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Posts Tagged ‘credit expansion’
More Debt More Better
Watch The Markets, Not The Fed
The Federal Reserve, along with most Central Banks around the world, are creating Cash and Credit at an unprecedented pace in the most ambitious economic experiment of all time. Yet despite Central Bankers attempts to create Cash and Credit (and hence inflation), the price of Gold fell from over $1900 to almost $1300. (more…)
A Liability for Every Asset
One of my strengths (and weaknesses) is that I was trained as an accountant. Double entry accounting follows specific rules. The rules of accounting, like other endeavors, do ebb and flow over time but Assets are always the sum of Liabilities and Equity. (more…)
Municipal Bonds Are Unique
Municipal bonds have been in the press more often lately. The Federal Reserve recently published a report on defaults in the municipal market precipitating arguments as to what constitutes a default as well as what constitutes a municipal bond. Such arguments bolster our position that while municipal bonds in the aggregate total almost $4 trillion, the marketplace is highly fragmented and the marketplace is a collection of tens of thousands of unique financial instruments too numerous to count. (more…)
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