The Same Exact Mistake As Greenspan
A report from the Business News Network in Canada. “More than half of the country believes home prices will never fall, according to a new poll from CIBC. Despite lofty valuations in the Toronto and Vancouver housing markets, 54 per cent of respondents to the CIBC poll say housing prices will rise indefinitely, while only 40 per cent think prices will decline over the course of the next five years. David Madani, senior Canadian economist at Capital Economics, thinks the unbridled optimism is just one more sign the Toronto housing market is in bubble territory. ‘The fact that the majority of Canadians still think home prices can continue to shoot up is sort of testament to the fact we’re in a full-blown housing bubble,’ he said in an interview with BNN.”
From Global News. “With house prices reaching record highs, the pressure is mounting on homeowners. A news report from RBC said that as home prices continue to climb, fewer homeowners feel they can weather the storm if there was a downturn in the housing market. The report goes on to say that a growing number of homeowners admit they’d be concerned if their mortgage payments went up by 10 per cent or more.”
“The report comes as no surprise to Darrin Surminsky, a bankruptcy trustee in Kelowna. He’s been watching the Kelowna housing market closely and is predicting a spike in foreclosures when interest rates finally begin to climb because some homeowners are already stretched to the limit. To add to the growing pressure on homeowners, Surminsky believes many are on the verge of bankruptcy because they’ve taken out a home equity line of credit — digging themselves deeper into debt with no way out.”
“‘What we’re seeing is people are kind of using their homes like ATM machines,’ he said.”
The Calgary Herald. “Alberta’s boom and bust economy has left Calgary with record numbers of newly built homes and condos that sit vacant as a massive stockpile of housing goes up for sale at the end of a recession. More than 2,000 new housing units were unoccupied in the Calgary area last month, the biggest inventory on record, driven largely by construction of apartment-style condos, according to the Canada Mortgage and Housing Corp.”
“While apartment-style condos account for more than half of the current housing surplus, there are large clusters of new, unsold homes in south Calgary suburbs. Across a swath of 24 southern neighbourhoods, from Evergreen to Legacy and from Douglas Glen to Cranston, there are 400 newly built, unoccupied homes, according to Canada’s housing agency.”
From Bloomberg. “There’s a pretty big housing bubble in Canada. By some measures, such as household debt to disposable income, it’s even bigger than the one in the U.S. a decade ago. People are going to look for someone to blame. Let me help. To put what’s happening in Canada in context, let’s first look at the U.S. Following one of the biggest stock market bubbles ever in the early 2000s, the Federal Reserve led by Chairman Alan Greenspan feared that a crash-induced loss of confidence could lead to a serious recession or even a depression. But the actual recession, in terms of the ‘real economy,’ turned out to be quite mild. Gross domestic product went negative, but not for consecutive quarters, so it didn’t even meet the technical definition of a recession. Then, a strong recovery began.”
“Greenspan engineered an epic monetary policy response to the downturn by cutting interest rates from 6.50 percent at the end of 2000 to 1 percent in 2003 and leaving them there until mid-2004, even though by that point it was clear that the recession was over and the recovery had begun. When the Fed did begin to raise rates, it was only at a pace that was ‘measured,’ which turned out to be a quarter of a percentage point at a time.”
“But too-easy monetary policy allowed a stock market bubble to morph into a housing bubble. In economics it can sometimes be difficult to determine causation. This is easy. Mark Carney was Governor of the Bank of Canada during the financial crisis and cut interest rates early and often leading up to the financial crisis.”
“It has now been almost nine years since the overnight rate was last above 1 percent. You can guess what happened next: a long period of negative real interest rates that led to an enormous misallocation of capital — again in residential real estate. A few years later, huge housing bubble — the same exact mistake as Greenspan.”
“As for Canada, it is still trying to figure out what to do about the exploding housing market. Pressure is starting to build on Stephen Poloz, Carney’s successor, to raise rates. That would help, but it is far too late. Poloz actually cut rates two years ago, partially because of recession fears and partially because he is obsessed with the foreign-exchange rate. Crude oil prices collapsed on his watch, which didn’t help.”
“This mistake happened because Carney had a bias toward easier policy. He was in no hurry to hike, even when it became apparent that Canada had escaped the worst of the crisis. What Group of 10 economies need are central bankers with a bias toward tighter policy. We now know what happens when you leave interest rates too low. Entire civilizations are ripped apart. Are there any consequences to leaving them too high? Why not give it a try?”
Hey Jingle, this is a bubble:
‘More than half of the country believes home prices will never fall’
That kind of mass delusional belief is a lot of things, but most of all, it’s just sad.
I had a Realturd this weekend tell me the beach front property in so CA never goes down, “they are not making any more.”
reminds me of that NAR cheerleader LAY ” Marin is gods country … yadda yadda never drop in price blah blah blah ” quote.
I remember listening to to Simpleton Young speak in 2005 and she predicted we’d level out like a souffle.
I purchased a place in Rancho Mirage for 75% off from the peak.
So much for a souffle.
Why should we believe her now?
Soufflé?
Soufflés are not known for “leveling off.”
Hey Donk.
Andthis is a bubble on the brink of collapse:
“40 per cent think prices will decline over the course of the next five years.”
‘Half Of Canada’s Millennial Homeowners Have Buyer’s Remorse’
‘Be careful what you wish for — and how much you pay for it. A new study has found more than half of Canada’s millennial homeowners want to sell their home, because the cost of housing is making them cash poor.’
‘Meanwhile, more than half of millennials (52 per cent) who don’t own a home are either convinced they will never own a home, or doubt they will be able to afford it.’
‘In a survey carried out by Angus Reid for CIBC, 81 per cent of millennial respondents (aged 18 to 34) who owned a home said they intend to sell it. While some four in 10 of them plan to upgrade, nearly two-thirds — 63 per cent — said it was due to the high cost of carrying a mortgage, and other housing costs.’
‘We now know what happens when you leave interest rates too low. Entire civilizations are ripped apart. Are there any consequences to leaving them too high?’
I know this is crazy talk, but how about letting the market determine interest rates?
In a centrally managed economy that doesn’t work.
More and more debt will fix things.
In the old days savings and production dictated the economy.
Now credit is created out of thin air and when folks default is there really a loss if there was nothing there in the first place?
You have to ask yourself if there are real consequences if you do not repay your debts.
For government. None
For bankers and the connected. None
For every one else…
You will be hounded to your grave (ie - Social Security garnishment) for any debt owed to government (public debt).
Your house will be taxed to infinity to pay public union pension debt.
For private debt. No consequences except your taxes will pay for the bank bailouts.
I wonder if you rack up $150k in student loans to get your advanced degree, then you move to Australia or Singapore, do they follow you?
what a coincidence; listing to some vintage music this morning & now a topic on Canada on the HB.
“And the men who hold high places
Must be the ones to start
Mold a new reality
Closer to the heart
Closer to the heart “
also listening.
If you’re familiar with that band, you’ll know this tune:
Big money goes around the world
Big money underground
Big money got a mighty voice
Big money make no sound
Big money pull a million strings
Big money hold the prize
Big money weave a mighty web
Big money draw the flies
Sometimes pushing people around
Sometimes pulling out the rug
Sometimes pushing all the buttons
Sometimes pulling out the plug
It’s the power and the glory
It’s a war in paradise
A Cinderella story
On a tumble of the dice
I wonder if you rack up $150k in student loans to get your advanced degree, then you move to Australia or Singapore, do they follow you?
It’s hard for them to truly follow you unless you continue to be paid by an American company…but they are always here waiting for you…with interest and penalties.
The game of Monopoly was created to teach three very important lessons. Lesson 1: The majority of players will lose everything. Lesson 2: Even the winner loses when there is no one left to rent his crapshacks. Lesson 3: If the bank runs out of money look around for some scrap paper to make some more so that the game can continue.
They will keep printing up fresh cash until people wise up (unlikely) or the game ends.
BAhhhhhhhhhhhhhh
roflow
Lesson 4:
Never trust the player that is also the banker.
‘In a centrally managed economy that doesn’t work’
OK Comrade Dude, but don’t you suppose the people sitting on 2,000 new unsold shacks in Calgary are losing a bit of money? Do you think Related lost a bit of change on that hole in the ground they cancelled in Miami Beach? I don’t want to hear this supply/demand garbage when the supply and price (interest rates) of cash are being manipulated with helicopter money.
Speaking of interest rates, I received my kids bank statement and showed them how to read it, because I’m trying to teach them to save their money. My son made 18 cents in interest. These young kids are really going to get shafted. It’s hard to teach my kids to be savers when they can put it in a shoebox and make about the same.
Kids today are into Bitcoin…
Eighteen cents? They must have a balance of thousands of dollars.
The lesson to be learned is that responsibility and thrift aren’t rewarded when our economy has come to depend on people forsaking those values.
“I know this is crazy talk, but how about letting the market determine interest rates?”
The FSA votes don’t come cheap…
That’s not being fair…
It’s for the children…
Children will starve and grandma will be thrown into the street…
There is NO WAY obama could have borrowed more that $10T in debt to get reelected with market driven interest rates…
‘There is NO WAY obama could have borrowed more that $10T in debt to get reelected with market driven interest rates’
The other day I watched a documentary on WW2. It was about the U-boat campaign the Germans were running and how they got to building these concrete bunkers in France to repair and store the boats. It was incredibly expensive, some of the biggest construction projects in history. A big limitation was money obviously. The Nazi’s couldn’t just print the stuff up unlimited. I got to thinking, what kind of mischief could they have done had their ability to print been like today? And what sort of unintended consequences might be happening in the current environment?
That also brings up a humorous story of WWII
Germany counterfeited British currency on a massive scale.
They were going to flood the market and crash the British Pound.
But the German produced notes were so perfect that no one noticed.
And the increase in the British money supply actually helped them in their war effort…
As a FYI. The British government actually changes out their currency regularly (about every 5 years). Old notes cannot be used for public commerce.
If you want to exchange them for new notes you have to go to the Bank of England - London office. And if you want to exchange more than a small amount you got some explaining to do…
When was the last time you saw an old $100 bill?
I knew a guy who was in Jordan during the build up to the Iraq war, the first one IIRC. Iraqi’s were using mostly US dollars for carry around money and the CIA wanted to mess with them. So they dropped billions in counterfeit US money from the air so people wouldn’t know what was valid and what wasn’t. This guy described seeing huge amounts of phony US $100 bills blowing across the desert.
The unique aspect of American Currency is that a $1 or $100 or any federally issued note (or coin) from anytime in US history (from 1787 to the present) is still legal tender.
No other country can make that claim. Not even close.
One of the reasons that the dollar is still the reserve currency of the world.
“One of the reasons that the dollar is still the reserve currency of the world.”
And why it will remain that way for a while yet (Ben, I understand if you choose not to publish this):
http://www.zerohedge.com/news/2017-04-11/china-threatens-bomb-north-koreas-nuclear-facilities-if-it-crosses-beijings-bottom-l
Anyone see what just happened there? Anyone? Anyone? Bueller? Bueller?
China and Russia were in the process of putting together a system and currency to replace the dollar as the world’s reserve currency.
The dinner at Mar A Lago must’ve been a doozie. While everyone, including myself, was distracted by Tomahawk missiles in Syria and wetting the bed, in one swell poop, Trump split China off from Russia, got China to choose between Russia and the US (using trade, and who is China’s best customer, hmm?) and also got China to handle NoKo, which no other president has been able to do.
I still don’t like the situation in Syria, however, my guess is that will fade. Putin has, for now, been neutralized.
Trump and Tillerson saved the dollar. My guess is that US bankers are relieved and will be backing off. What’s in it for the regular citizen? Well, maybe we won’t get crisped just yet. And as much as the economy sucks, it would suck a whole lot worse if the dollar lost its reserve status. Trump has been treading a minefield and yes, he made a misstep. Or did he?
And my point.
How many different currencies has Russia/USSR and China had in the last 100 years that are now worthless?
Combined - About eight or nine…all worthless except their most current ones.
Both of which currently have significant issues…
Who wants that as a reserve currency? Who would trust it? Who put ANY faith in it?
No one.
‘any federally issued note (or coin) from anytime in US history (from 1787 to the present) is still legal tender’
I don’t know if that’s true, but I rarely see $20 bills that aren’t the new electronically tracked money. They’ve been removing it for a long time. Now if you find a tenner in granny’s shoe box, fine. But show up with any sizeable amount of the old notes and you’ll go on a list, as you will if you use cash over 3 grand.
‘Who wants that as a reserve currency? Who would trust it? Who put ANY faith in it? No one.’
Best horse at the glue factory.
‘Between 1783 and 1913, the U.S. dollar was a real store of wealth. Except during wartime periods, inflation within the United States was essentially zero. If you saved one dollar in 1800, a hundred years later you could still purchase approximately the same amount of goods with your savings.’
‘But in 1913 something changed, and the U.S. dollar started down a long, steady road of devaluations. Using the U.S. government’s own figures, to obtain the same amount of purchasing power of $100 in 1913, you would need over $2,000 today.’
‘In 1970, at the age of 77, Herbert W. Armstrong wrote about how as a boy his mother had asked him to “[g]o to the meat shop and get a dime’s worth of round steak. And tell the butcher to put in plenty of suet.” A “dime’s worth” meant each person in his family received a modest-sized piece of meat, plus plenty of gravy for the potatoes.’
‘In times past, the dollar certainly stretched further. Mr. Armstrong quoted the Labor Department’s figures for how much $5 would have purchased in 1913: 15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee; that money would also get you two loaves of bread, 4 quarts of milk and a dozen eggs. “This would leave you with 2 cents for candy,” he wrote.’
https://www.thetrumpet.com/3237-why-the-u-s-dollar-constantly-loses-value
“Best horse at the glue factory.”
Right on the money, lol.
I like “has the most fingers in the leper colony” myself . . .
Before going off to WWII my dad worked on a farm for $1 silver a day.
“Best horse at the glue factory.”
One bad part about it.. it forces everyone to become speculators, to try to escape the decay of money. As a result, everything imaginable gets securitized for “investments” and we end up with one giant casino world.
24×7, 365 days a year, it is a never-ending, grinding decay, always there. You got to beat that force, just to stay even.
How would Fannie Mae and Freddie Mac implement their race- and income-based allocation of housing credit if the market were allowed to determine interest rates? With artificially low rates, an artificial shortage of loanable funds results, leading to the perfect political opportunity to allocate credit to the annointed demographic group. (If you are a middle class white guy, you ain’t in it.)
Another Denver narrative:
http://www.cpr.org/news/story/why-is-denvers-housing-market-still-on-fire-supply-and-demand
“The same exact mistake as Greenspan… We now know what happens when you leave interest rates too low. Entire civilizations are ripped apart.”
From Bloomberg no less. So after 17+ years of this nonsense, after untold billions in lost savings, funneled into the black hole of artificially-inflated asset prices, NOW they acknowledge the “mistake”?
Our system really isn’t that fragile. One bad policy decision, years ago, does not lead to “entire civilizations ripped apart.” But a bad policy decision cheered on by a corrupt and willfully blind media, codified by self-interested politicians in the pocket of entrenched financial interests, and expanded exponentially by the participation of a greedy and/or increasingly desperate populace… now that really does lead to “entire civilizations ripped apart.”
Sounds like more than just one little innocent mistake by one or two guys at the top, right Bloomberg?
Are there any consequences to leaving them too high? Why not give it a try?
In the policy maker’s theory, all debt is good debt. It helps the economy grow. One man’s debt is another man’s asset (dunno how central bank printing fits into this).
But, just like they don’t disaggregate demand into consumption and speculative demand, they don’t disaggregate debt into investment debt and consumption debt. Investment debt where a company borrows in order to build out, and creates wealth and obtains much more back than the debt is no different from an individual putting his house up as collateral for a loan and buying a new truck or going on vacation. There are no wealth-creation consequences from consumption debt.
You can say well, the truck or the vacation employed people, but the truck depreciates and the vacation is for enjoyment - there are no persistent wealth creation effects. And the person is stuck paying it off for the next several years, reducing his consumption.
It seems we have got into this pattern of creating credit out of thin air and extending it to debtors. When they quit paying the folks claim they have a loss. But nothing was ever really lost and then they write it off and move on to the next person. If all this credit extended was actually hard earned money than there would be a lot less of it for sure. They keep trying to grow this economy by debt.
Keller, TX Housing Prices Crater 7% YoY
https://www.zillow.com/keller-tx/home-values/
Grant Cardone, bestselling author, speaker, and motivator, has called buying a home “a scam.” Cardone previously told Business Insider that the best investment you can make is in your freedom, and owning a house destroys that freedom by eliminating your choices and tying you to one place.
Spot on.
‘A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama. The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down.’
‘Libor is the rate at which banks lend to each other, setting a benchmark for mortgages and loans for ordinary customers. In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates.’
‘He tells him: “The bottom line is you’re going to absolutely hate this… but we’ve had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower.”
‘Mr Johnson objects, saying that this would mean breaking the rules for setting Libor, which required him to put in rates based only on the cost of borrowing cash. Mr Johnson says: “So I’ll push them below a realistic level of where I think I can get money?”
‘His boss Mr Dearlove replies: “The fact of the matter is we’ve got the Bank of England, all sorts of people involved in the whole thing… I am as reluctant as you are… these guys have just turned around and said just do it.”
the banker always wins!
Not if you refuse to play the game…
MOAR STAWKS!
Lincoln, NH Housing Prices Crater 10% YoY
https://www.zillow.com/lincoln-nh/home-values/
This is what real estate does to you. Buy now!
http://www.infomercial-hell.com/wp-content/uploads/2006/08/vu_yacht_3.jpg
I don’t know man, he’s got babes, a yacht and a swanky track suit. I’m not seeing the problem here?
Hehe… no dead-bedroom for Tom, and yes he had to pay for them, but ask any married guy… it’s never free.
Amerikkans will buy anything.
https://www.youtube.com/watch?v=6llB5QR1Nmc
Oh, hey, what’s this? Someone else just made the connection what happened with China and No-ko AND Russia? You’re not quite there yet, Alex, but it’s a good start. A little less bed-wetting about Syria, OK?
https://www.infowars.com/trump-wins-game-of-nuclear-chicken-with-china-dprk-forced-to-stand-dow
You can thank Tn’T that you’re not glowing in the dark right now, and that, at this time, life goes on and you can still get paid with and spend some petrodollar fiat. It’s not the greatest, but imagine the misery for US citizens if the Russian-China financial pincers operation had gone forward. Think they would have let us have any? It would have been Zimbabwe time. And I don’t know about you, but I don’t have any goats or chickens to trade.
Worst president ever? My patootie. Putin and Xi were playing both ends against da meddle fanger. And da meddle fanger struck back. This was Cuban Missile Crisis level stuff that happened. And not just with one country, but with THREE, all at once. And I dunno, but if I were getting shredded and nailed to the cross like the president was through all of this, I might have been very tempted to give a bunch of ignorant ingrates da meddle fanger, too. Especially the media. They still get to bloviate in front of the cameras and on the radio and on the interwebs.
One for the history books.
If Screech was in the White House this past week we’d be in WW3.
He-he, I was thinking the EXACT same thing and was going to come back and add that, but you beat me to it. Personally, in that she had major dealings with both Russia and China, my take is that there would have been a nuclear incident and she would have surrendered the country to the globalist system as cobbled together by China and Russia, “for the children”, and cackled all the way to the bank, like the Wicked Witch. She would have been appointed the “Premier” of the US. I am convinced she and Obama sold us out much worse than we know. No wonder he’s hiding out in Tahiti.
I just read that Russia is all of a sudden offering to the US a weapons inspection of Syria. Putin got caught with his hand in the cookie jar. Tillerson was in Moscow today, while Trump was taking care of the other business. Whew, that was one heck of a close call.
BTW, Ben, you were right about Tillerson. The guy is rock steady, great counterpoint to Trump. Alex Jones was going off on him earlier today, “Oooh, ooh, Tillerson’s running the show, he’s running the generals!” I bet he was, too. Probably why we’re still here. I would have loved to hear the conversation he had with Lavrov.
“…together by China and Russia”
I agree that it looks so far like a very good outcome. I don’t think so much that China and Russia are the drivers of the globalist agenda, rather the opposite. Perhaps we can act together in mutual interest in ways that were not possible with the US in the grip of the Globalists.
“I don’t think so much that China and Russia are the drivers of the globalist agenda, rather the opposite.”
https://www.wsj.com/articles/chinas-xi-jinping-defends-globalization-1484654899
As far as a country goes, China is THE driver of globalization and has benefited the most. Russia is just trying to survive.
As you know, the real drivers of globalization are the banks and assorted multinationals, including tech companies. My guess is that a CEO or two or three may have been sitting in some small rooms with their attorneys, having earnest discussions with representatives from the FBI or NSA or whoever.
“Perhaps we can act together in mutual interest in ways that were not possible with the US in the grip of the Globalists.”
We just did. That’s exactly what happened, although it looks like there has been considerable arm twisting to get China and Russia to concur on the mutual interests. China blinked first. He who blinks first, blinks best. Interesting how both countries were using their client states as the tips of their swords.
We probably won’t know all of what really happened until everything gets de-classified, as with JFK.
Tee-hee. The stories at the top of ZH right now.
http://www.zerohedge.com/news/2017-04-12/trump-unexpectedly-calls-chinas-president-discuss-north-korea
http://www.zerohedge.com/news/2017-04-12/putin-warns-trust-between-us-and-russia-has-collapsed-under-trump-tillerson-gets-fri
The comments demonstrate peak cluelessness. Of course Putin is pissed, no way is he going to meet with Tillerson. And that’s OK with T-Rex. Lavrov will suffice. He can transmit things to Vladimir.
I hope so too. I am just worried that the globalists are starting to win back too much power in Trump’s administration.
“the globalists are starting to win back too much power in Trump’s administration.”
Based on all the howling Lee Stranahan is doing? I’ve been following him a bit, as you may know. I am no fan of the Ivanka and Jared show by any means, but I’ve come to the conclusion that it’s a side show. Stranahan is not being helpful right now.
Anyway, to put your mind at ease, Charles Hugh Smith has the best take on this:
http://www.oftwominds.com/blogapr17/long-game4-17.html
http://www.oftwominds.com/blogapr17/signaling-empire4-17.html
Enjoy. And watch Tillerson. The country is in good hands.
My impression of Globalism is an elite class without borders aiming to rule the masses around the globe. China and Russia have the elite class thing but it is nationalistic, just my opinion.
“My impression of Globalism is an elite class without borders aiming to rule the masses around the globe. China and Russia have the elite class thing but it is nationalistic, just my opinion.”
We’re not in disagreement here, Blue. In fact the whole globalism vs nationalism thing is rather schizoid. Globalists want to have their cake and eat it, too. The truth is, they can’t exist without countries, borders, armies, police forces and citizens to pay for it all with taxes. How long do you think Soros or Kissinger, for example, would last if it weren’t for the vast skirts of the US to hide behind? Or the titans of Google, Facebook or Amazon? Or the Goldman boyz?
Anyone remember what happened to the Romanov family?
The Fed has controlled internal U.S. interest rates for so long that I cannot cannot envision how market-determined rates would even work.
Is it safe to say that there has never, ever been a better time to buy stocks?
This blithe market is showing no fear — and that’s a worry, says Doug Kass
By Victor Reklaitis
Published: Apr 12, 2017 7:26 a.m. ET
…
What do you make of this..
https://www.nytimes.com/2017/03/29/business/westinghouse-toshiba-nuclear-bankruptcy.html
Toshiba Casts Doubt on Its Ability to Stay in Business
https://www.nytimes.com/2017/04/11/business/dealbook/toshiba-foxconn-chips-deal.html
Right now Toshiba is my primary focus at work (the chip side). I have a friend in Shanghai working for Westinghouse doing nuclear installations. I tease him that he’s messing up my business.
It will be interesting to see who buys the chip business. I’d prefer that it was one of my other customers rather than Foxconn. I think I would be less likely to lose the business that way.
“This mistake happened because Carney had a bias toward easier policy. He was in no hurry to hike, even when it became apparent that Canada had escaped the worst of the crisis. What Group of 10 economies need are central bankers with a bias toward tighter policy. We now know what happens when you leave interest rates too low. Entire civilizations are ripped apart. Are there any consequences to leaving them too high? Why not give it a try?”
The great thing about being a central banker is that since they are unelected officials, they can conduct policy with the comfort that they need never respond to critiques like this one.
It really seems central banks have got comfortable creating as much money as needed to support asset prices. What is the limit to the balance sheet? Is there one? Lets take it to 10 trillion.
No balance street limit, as proven by Ben Bernanke. The Fed can snap up anything and everything it wants by merely entering the amount it wants to pay for an asset in the asset column of its balance sheet, then virtually printing the monies to enable the purchase.
http://www.cnbc.com/2017/04/12/real-estate-mogul-buying-a-house-is-your-fastest-path-to-wealth.html
save your pennies and buy!
Not Even a Smidgen