The Business Cycle has not been the Cumulative Driver of Economic Expansion.
And why the Quantitative Theory of Money is at best incomplete.
________________________________________________________________________
We are in an Extension of the Credit Cycle - an Experiment gone horrifically wrong.
_________________________________________________________________________
Typically the Equity Complex adjusts to what is perceived as too much tightening.
The Federal Reserve knows it must pace itself and they will. The wording on January, 26th
will be Key - as If the Raven comes off too aggressive, Participants will look forward initially
and perceive a Shock.
The assumption within the Model is one of declining Prices once the FED begins to tighten.
Not going to happen, Prices will continue to Rise in REAL TERMS and Purchasing Power Parity
will continue to be reduced by ever more insidious amounts.
__________________________________________________________________________
Perception Management is the FEDs Agenda for managing their Domain.
Cui Bono?
Up to you to provide our own answer(s).
M2 never declines.
Velocity can increase when price increases cause a reactionary chase to hoard what will
be perceived to be higher in price in the Future, then and only then will we see M2 Velocity
Increase.
___________________________________________________________________________
Productivity of Capital - The average credit cycle is longer than the business cycle in duration
as TIME requires a weakening of corporate fundamentals and property values, the 2 indicators
most closely followed with respect to ASSET Valuations.
Extreme extensions of credit in terms of amount and period in conjunction with Fiscal Policies
can further Distort and Distend the Malignant System.
____________________________________________________________________________
Presently, the ONLY thing keeping this dysfunctional system together is the Federal Reserve.
The rest of it is for Historians to sort out, as it has all been dumped on its collective head.
Functioning, or properly functioning Markets that are efficient and open to information flow.
We do not nor have not seen in a very long time.
Playing Poker with a Blindfold is not "Investing" it is speculating everyone else is wearing
one as well.
They are not.
And why the Quantitative Theory of Money is at best incomplete.
________________________________________________________________________
We are in an Extension of the Credit Cycle - an Experiment gone horrifically wrong.
_________________________________________________________________________
Typically the Equity Complex adjusts to what is perceived as too much tightening.
The Federal Reserve knows it must pace itself and they will. The wording on January, 26th
will be Key - as If the Raven comes off too aggressive, Participants will look forward initially
and perceive a Shock.
The assumption within the Model is one of declining Prices once the FED begins to tighten.
Not going to happen, Prices will continue to Rise in REAL TERMS and Purchasing Power Parity
will continue to be reduced by ever more insidious amounts.
__________________________________________________________________________
Perception Management is the FEDs Agenda for managing their Domain.
Cui Bono?
Up to you to provide our own answer(s).
M2 never declines.
Velocity can increase when price increases cause a reactionary chase to hoard what will
be perceived to be higher in price in the Future, then and only then will we see M2 Velocity
Increase.
___________________________________________________________________________
Productivity of Capital - The average credit cycle is longer than the business cycle in duration
as TIME requires a weakening of corporate fundamentals and property values, the 2 indicators
most closely followed with respect to ASSET Valuations.
Extreme extensions of credit in terms of amount and period in conjunction with Fiscal Policies
can further Distort and Distend the Malignant System.
____________________________________________________________________________
Presently, the ONLY thing keeping this dysfunctional system together is the Federal Reserve.
The rest of it is for Historians to sort out, as it has all been dumped on its collective head.
Functioning, or properly functioning Markets that are efficient and open to information flow.
We do not nor have not seen in a very long time.
Playing Poker with a Blindfold is not "Investing" it is speculating everyone else is wearing
one as well.
They are not.
Comment:
SMH Down 1.14%
DOW / ES Sectors clipped hard.
Tomorrow is going to be very interesting, still ranging into the Year Ed print.