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wonderpup

Is Anyone Talking About This?

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Two things that superficially seemed rather different and separate to me I now realise are the same thing; the first being the Fed's sudden interest in 'Tapering' and the second being the recent credit 'event' in China.

What we are seeing here is that both the US and China have finally grasped the fact that they need to constrain the speculative bubbles that now threaten a meltdown of their respective economies.

So we now have two of the largest economies on the planet trying to tighten their policies at the same time

Is this being discussed anywhere? I find it odd that the media don't seem to have picked up on it.

Edited by wonderpup

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Watch what they do, not what they say.

While the effect of tightening/tapering on the average man will be negligible (mortgage costs up, all other costs down), it would mean actual (REAL!!!) cuts to the public sector. So its unlikely to happen given ALL political parties in ALL developed countries are beholden to the public sector unions.

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China is the crooked wheel. Its shadow banking system is beyond the reach of Benny, Carney and co. The enormous property bubble that the Chinese govt blew up post 2008 appears critically to have burst and the subsequent forces of liquidation and deleveraging will need to be managed by China alone. In effect, the massive global liquidity provisions being made by the Fed and BoJ are now at risk of disappearing down a Chinese govt plughole. At the same time the Fed is facing its own dilemma. Surging tax collections and redemptions from Fannie and Freddie are dramatically cutting the govt's deficit and reducing the demand for new treasury issuance. With less treasury supply to absorb $115bn fresh QE every month bubbles in stock prices, housing and food prices are likely to be exacerbated. The consequences of rampant food inflation can be seen on the streets of Sao Paolo and Cairo.

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China is the crooked wheel. Its shadow banking system is beyond the reach of Benny, Carney and co. The enormous property bubble that the Chinese govt blew up post 2008 appears critically to have burst and the subsequent forces of liquidation and deleveraging will need to be managed by China alone. In effect, the massive global liquidity provisions being made by the Fed and BoJ are now at risk of disappearing down a Chinese govt plughole. At the same time the Fed is facing its own dilemma. Surging tax collections and redemptions from Fannie and Freddie are dramatically cutting the govt's deficit and reducing the demand for new treasury issuance. With less treasury supply to absorb $115bn fresh QE every month bubbles in stock prices, housing and food prices are likely to be exacerbated. The consequences of rampant food inflation can be seen on the streets of Sao Paolo and Cairo.

good post

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  • 239 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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