Central banker to the world

Credit Bubble Bulletin/Doug Noland/7-13-2019

“I don’t believe the primary impetus behind the global central bank swing toward additional stimulus is economic. Indeed, I see Powell, Draghi, Carney, Kuroda and the like confirming the Acute Global Financial Fragilities Thesis. This fanciful notion of “insurance” stimulus will be debated for years to come. A system suffering from risk aversion, illiquidity and Credit contraction would be expected to experience some perk from monetary stimulus. But a global financial ‘system’ already excessively embracing risk, wallowing in liquidity abundance and generating record Credit growth will be only further destabilized by greater stimulus. I’ve been long fascinated by how things turn ‘crazy’ at the end of cycles. My thesis is the world is in the late stage of an extraordinary multi-decade Credit Bubble. From this perspective, we should not be surprised by phenomenal late-cycle excess.”

USAGOLD note:  I thought for sure that Noland was headed for “politics” as the reason for the additional stimulus, but he thinks it’s a fragile global financial bubble that needs propping up.  He says the additional Fed stimulus though is “effectively throwing gas on the fire.” –  Worth the visit for the full flow of Noland’s logic with respect to where we are now. . . . .

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