from Wolf Street:
W. Ben Hunt, Chief Risk Officer of Salient Partners, described a fascinating phenomenon – and one with a potentially dreadful outcome.
He’d spent a few weeks traveling across the country to meet with Salient clients – investment advisors and professional investors – to understand their thinking about the markets in what he called “the Golden Age of the Central Banker.” And what surprised him was how widespread, how near universal that phenomenon has become among these professionals.
Today, everyone believes that market price levels are largely driven by monetary policy and that we are all being played by politicians and central bankers using their words for effect rather than direct communication. No one requires convincing that market price levels are unsupported by real world economic activity. Everyone believes that this will all end badly, and the only real question is when.
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