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>> A potentially more productive view is that the fed cannot support the bubble indefinitely. The interesting thing is whether "cannot" means the point when th
by TuringNYC 6y ago
>> A potentially more productive view is that the fed cannot support the bubble indefinitely.
The interesting thing is whether "cannot" means the point when they literally can not because the market and inflation wont bear it...or when they wise up to the tinder box they have created. The problem with the latter is -- which administration would allow this to be under their watch. Once a problem is bad enough, you might as well just kick the can a bit more until you literally can not.
(yes, i realize the Fed is independent but there is still quite a bit of control)
- lumost 6y agoThere are many situations where the fed is forced to end its current policies prior to the expected triggers of market stability or increased CPI. Political and social risk is likely underestimated. That being said, examining the exit paths and forcing functions which would force Fed policy to change is something I'd like to see more of. There is a certain mentality floating around that there are no alternatives to being in the market, and that it's become too politically difficult to end Fed market support. If the latter is true, then there are a lot of consequences - such as returns becoming decoupled from cash flow see TSLA, Unicorns, or Hertz.