Debt Rattle August 5 2016
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G.G. Bain Three-ton electric sign blown into Broadway, New York. 1912 • New Tool for Central Banks: Buying Corporate Bonds (WSJ) • UK Interest Rate Cu
[See the full post at: Debt Rattle August 5 2016]In 2002 before I knew much of anything about money, monetary policy or bubbles I predicted that corporate issued paper, equity and debt, would be the basic store of value in the Western world and I think central banks monetizing corporate debt means that has come true. The levitation of stocks on the flood of money produced by monetizing soverign debt serves the same function but is indirect. The direct purchase of corporate debt by central banks is where the deed is officially done.
Next up is central bank or government purchase of stocks as is being done in China and in Japan too via ETF’s. Soon enough here too I suspect although who doubts that they are not involved in buying stock derivatives, futures especially, to launch the now so familiar rocket launches producing spike lows.
To my mind we now have had a monetary reset and it’s a whole new world. I differ from most here in that I think we are only in the early innings.I won’t be shocked if I am wrong and there is a crash but neither will I be shocked if the DOW is at 36,000 by the by.
Ask not how many dollars does it take to buy 1000 shares of a major corporation but rather how many dollars will 1000 shares buy.
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