Half a Bubble Off Dead Center
April 20, 2015
Stuck in a Liquidity Trap?
The Economic Singularity
The Minsky Moment
The Event Horizon
Where Does Growth Come From?
Economic Distortions and Unintended Consequences
San Diego, Raleigh, Atlanta, and New York
I can sense a growing unease as I talk with investors and other friends, from professional market watchers and traders to casual observers. What in the Wide World of Sports is going on? It is not just that markets are behaving in an unusual and volatile manner (see chart below showing multiple double-digit moves in the last few months); it’s that the data seems to be so conflicting. One day we get data that shows the economies of the developed world to be slowing, and the next day we get positive numbers. The ship of the economy seems to be drifting rudderless.
My dad used to say about a situation that just didn’t seem quite right that things were “about a half a bubble off dead center.” (This was back in the days when we used bubble levels to determine whether something was level or plumb – before today’s fancy digital gadgets.)
There is a reason, I think, that everything seems just a little out of kilter. I believe that central banks, in their valiant, unceasing efforts to restore liquidity and growth, have unleashed numerous unintended consequences that are beginning to show up in earnest. Today we are going to review the well-meaning behavior of central banks for clues about our near future.
But first, let me take one final opportunity to invite you to come to the 2015 Strategic Investment Conference. We’ve assembled an amazing cast of speakers who will delve deeply into what is really driving the world’s economy. I have some of the finest experts on China...