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It's bad fiscal policy that's leading these trends. Our government has a huge deficit and huge debt. QE is essentially money printing, but rather than simply pr
by Rury 7y ago
It's bad fiscal policy that's leading these trends. Our government has a huge deficit and huge debt. QE is essentially money printing, but rather than simply printing money, they (central banks) take equivalent value in assets off the market until they can be repaid the money to destroy. As so it has the same affect as inflation in the form of asset price bubbles until said money is destroyed. A large part of the FED's balance sheet is composed of mortgage backed securities and government debt, and it continues to grow with the repo stuff going on now. Other central banks around the world have been doing similar things...
When will it all end? Not sure, but the way I see it, there's 3 ways things can play out...
1) It will not end, and we continue to accept runaway inequality, where housing/healthcare/education etc. become more and more unaffordable in comparison to normal wages. Only owners of capital will be protected (i.e. stocks/assets continue to get propped up).
2) We somehow turn ship and slowly fix our fiscal problems (not going to happen so long as we have deficits). This would mean accepting economical stagnation for a long while to essentially pay off our accrued debts
3) We let things start crashing
So far 1 is playing out...