Flying Blind With the Fed
I was pleased to be quoted extensively in Michael Hirsh’s new article in Foreign Policy about the perils of the multi trillion dollar world wide debt overhang accompanied by the same kind of risky financial engineering present in the run up to the 2008 financial crisis. https://lnkd.in/dDUCGfk But, this time, as Hirsh accurately observes, the world and U.S. regulators are bereft of many of the “rescue” tools available in 2008-2009. For example, interest rates cannot be greatly lowered as a stimulus when negative and very low rates already prevail. Hirsh quotes experts fearing that the present widespread complacency about, for example, the US economy is a perfect set up to a highly destabilizing financial “Minsky Moment,” i. e., a panic made worse by its complete unexpectedness.