by Doug Noland, PrudentBear.com:
Air leaks from Japanese stocks and bonds and global Bubbles suddenly appear more vulnerable
For centuries, economic thinkers have grappled with money and Credit. Invariably, analytical interest ebbs and flows right along with boom and bust cycles. And during periods of keenest interest, there’s a common recurring question that’s been asked through the ages: “How could a period of economic advancement and prosperity that looked so promising and enduring come to such a dreadful end?” The answer too often is some variation of how money and Credit run amuck over the course of the boom.
It’s a challenge to place contemporary monetary analysis into historical context. After all, we’re talking about extraordinary financial and economic innovation; unmatched integration of global economic and financial systems; unprecedented global financial excess and imbalances; experimental central bank doctrine and unprecedented monetary stimulus. It’s uncharted waters virtually across the board, which naturally evokes quite divergent views and analytical perspectives. Surging asset markets have largely squelched one side of the debate, while providing a fancy megaphone to the other.
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