Abject monetary disorder

Credit Bubble Bulletin/Doug Noland

“I’ve witnessed a lot of ‘crazy’ in my three decades of closely following various Bubble markets (i.e. Japan’s Nikkei ending 1989 at 38,916 (closed Friday at 21,746); manic early-nineties buying of Mexican tesobonos; late-1993 collapsing U.S. yields and Bubble excess that portended the 1994 rout; speculative Bubbles in SE Asian securities and Russian bonds; LTCM with $2 TN notional derivatives exposures; Internet and tech stocks in 1999; and $1 TN of new subprime CDOs in 2006; etc.). Yet nothing compares to the ongoing global yield collapse. . .According to Bloomberg, the amount of negative-yielding debt globally jumped Thursday to a record $13.4 TN. Rising almost $2.2 TN over the past month, ‘negative-yielding debt now comprises 25%’ of the total investment-grade universe.”

USAGOLD note:  Doug Noland maps the complicated terrain that comprises credit markets at this point in time and concludes that the Fed “should think twice before it feeds this beast.”  Both the White House and Wall Street though say – “Consequences be damned – feed the beast. Go to zero.  Go beyond.”  The Fed must decide whether or not to push button.


Repost from 7-8-2019 [Note 7-10-2019 – Looks like it has decided to feed the best/push the button. . .]

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