It's good to remember how chaotic nature in which the GFC unfolded. The fed pivot back to reducing rates and QE, won't be the end of this crisis. The return of "low rates" and QE may give temporary relief but will be sending us back to the zero bound. The concept of zero interest should be an anathema to the Central Bankers yet they are drawn to it like moths to a flame. I view that zero bound as something like a black hole, as interest rates approach zero, economic reality distorts. I don't know if the Central Bankers go that far again, but watching the BOJ and BOE, it seems that they have no choice when the world governments are so grossly over levered. One off ramp could be if all the Central Bankers of the World agree upon a massive global monetary reset of some type (debt jubilee?). At any rate, we are in the early innings of this economic crisis and because this one is began when we were at the zero bound, it is likely to go on much longer as in many years and have many more twists and turns along the way. Thanks Kayfabe for the reminder that this crisis is likely to take a long time to play out, and that as investors we need to have thoughtful conservative capital preserving strategies.
It's good to remember how chaotic nature in which the GFC unfolded. The fed pivot back to reducing rates and QE, won't be the end of this crisis. The return of "low rates" and QE may give temporary relief but will be sending us back to the zero bound. The concept of zero interest should be an anathema to the Central Bankers yet they are drawn to it like moths to a flame. I view that zero bound as something like a black hole, as interest rates approach zero, economic reality distorts. I don't know if the Central Bankers go that far again, but watching the BOJ and BOE, it seems that they have no choice when the world governments are so grossly over levered. One off ramp could be if all the Central Bankers of the World agree upon a massive global monetary reset of some type (debt jubilee?). At any rate, we are in the early innings of this economic crisis and because this one is began when we were at the zero bound, it is likely to go on much longer as in many years and have many more twists and turns along the way. Thanks Kayfabe for the reminder that this crisis is likely to take a long time to play out, and that as investors we need to have thoughtful conservative capital preserving strategies.