Friday, September 22, 2017

Mark Grant: Central Bank Liquidity Drives Everything

Mark Grant Interview starts at 11:04.  The good stuff starts at about 27:00.

From Mark's article on Stock Twits
..."To put things into the correct perspective, the Fed's $4.471 trillion balance sheet will shrink by $10 billion per month in October and November if the Fed actually follows the plan that it is kind of, sort of, laid out. Putting this maybe-maybe change into context over the same time period, the Bank of Japan and the ECB will continue adding new liquidity amounting to more than $400 billion, according to data supplied by Deutsche Bank.

As a result, in the 4th Quarter, global liquidity will increase by some $355 billion should the Fed actually begin their journey to a "Normal" that does not exist, in September or October. I have made this point before. There is no "New Normal" and no "Old Normal" because the central banks, since the 2008/2009 debacle, have created an economic environment that has nothing "Normal" connected to it. It never existed before. To use the word "Normal" it must have a history to substantiate it. It is therefore the height of absurdity to think that we are returning to somewhere that never existed before.

The central banks created a "Wonderland," a financial make-believe story, if you will, where, using manufactured Capital, interest rates and equity prices are the result of the "Crown of Creation" that the central banks have concocted. We went down the rabbit hole and neither the blue pill or the yellow pill are going to get us back out any time soon."

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