Posted on December 12, 2017 by Charles Hugh Smith WashingtonsBlog The conventional investment wisdom holds that central banks will never let markets decline. This is an interesting belief, given that two previous asset bubbles based on central bank “easy money” both imploded, impoverishing believers in central bank omnipotence. So perhaps we can say that the conventional investment wisdom holds that any asset bubble that bursts will quickly be reflated into an even more extreme asset bubble. That’s certainly been the history of the past 17 years. But there’s a case to be made that bubbles are like strikes, and you only...Read More
Tag: central bank
Posted on December 5, 2017 by Charles Hugh Smith WashingtonsBlog If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would either be the stagnation of income or the spiraling out of control cost basis of our economy, that is, the essential foundational expenses of households, government and enterprise. Clearly, both rising costs and stagnating income cause households to lose ground, i.e. their income buys fewer goods and services every year. I’ve often covered the dynamics of stagnating income for the bottom 95%, and real-world inflation, i.e. a decline in purchasing power. But...Read More
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