One would not normally call the Fed “radical”, yet that’s exactly what Druckenmiller called them in a recent interview. I couldn’t agree more. He joins a growing chorus of top financiers who are despairing at the Fed’s folly (Dalio, Grantham, Summers...).
Why is the Fed so radical? In a word, politics - populist politics, to be exact. Just because Trump lost the presidency doesn’t mean that populism has gone away from the American political scene. If anything, it has only grown stronger as politicians of both parties are vying for the hearts and minds of a deeply divided nation. They are in a cash bidding war for the votes of Americans who are deeply disenchanted with their political status quo.
So, when in doubt, buy them out. No matter which party governs, it’s no longer an ideological contest but a cash-slinging mud fight. Good luck with that... I have seen many a country try that and it ALWAYS ends up the same way: bankruptcy and misery. Argentina and Greece come immediately to mind, but history is full of similar examples.
Another full-circle turn in equity markets... From sharp sell-off to furious buying.
ReplyDeleteZombie money = zombie markets.
ReplyDeleteThe most worrisome development is that the Fed’s “moral suasion” stance has shifted completely to “let’s party, who cares about tomorrow “... aaahhh but the wages of sun are always due and payable..
Deletelaugh... "Zombie money = zombie markets", beautiful turn of phrase =)
Deleteto answer your old point... Bernie wants (effectively) the same thing as me, if you pay everyone a huge amount of money, you pay everyone nothing...
Hi Hell, just answer the pts in previous post.
ReplyDeleteNo, I really don't think the Chinese actually want to rule the world. I know there is a lot of propaganda about how peaceable the Chinese are but in this case, there is a seed of truth.
What the Chinese really want is safety and security in the world; however, to ensure that for 1.4 billion people, you basically end up taking over the world... which leads to the real problem... the Chinese are not set up for ruling the world, they can't, won't, don't, want to take responsibility/ see the big picture...
it sounds like a trivial problem but really it is not... it runs deep in our people and culture... like an ancestral curse ... a sort of blindness of the really intelligent...
abt the technology, here is how China is set up.
ReplyDeleteThe Chinese universities are full of professors that teach rubbish. they are idiots and everyone knows they are idiots.
The students learn from working in the companies... it is hard and brutal... but it possesses a deep and wide pool of knowledge to draw on ... it results in superb engineering but also a blind arrogance and scorn for the bigger picture.
U.S tech... it still leads the world...
ReplyDeleteI would say no more... that line was passed a decade ago...
The tech that supposedly comes from the U.S. is mostly created by Chinese... in theory you can call it U.S. tech... but actually it is not...
In my field, half of the researchers are Chinese... if you count the younger ones, it is 80 percent...
P.S the top school in guangdong is zhongshan...
P.P.S false modesty aside, I think I can explain my field (both width and depth) better than any U.S. professor you could care to name... but it is not fair to judge the U.S. that way, it would be like saying your most intelligent man is Krugman..
i dun view the chinese rise as a good thing for the chinese themselves... or for science or tech....
ReplyDeletewe rose by cannibalizing the U.S. system... but we don't offer an alternative, I fear that without it, the bed rock of deep scientific thinking will die... actually I am sure it will die... these days, I need to find older and older people before I can actually have a deep technical discussion....
to provide the big picture, you can't have research excellence without the industry and vice versa... the U.S. is rapidly loosing both...
ReplyDeletefor evidence that you can see for yourself, look at how expensive it is for the U.S. to produce new fighters and ships.... once technical expertise was everywhere... now, you need to search very hard to find a guy that knows what he is talking about...
but yes... for the absolute best..... the old U.S. hands are still the best... you need to find them and rebuild from there... they will not be your industrial or academic leaders though.....
Bingo: no industry - no research - no tech advance —-> economy loses competitive advantage, Empire ends up in the dustbin of history... The British are the perfect example.
ReplyDelete