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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (109483)1/4/2015 4:39:37 PM
From: THE ANT  Read Replies (1) | Respond to of 219967
 
Asset price inflation is inflation until its not.In the medium to long term all assets value will generally be based on asset income flow. In the short run assets can fluctuate based on sentiment,debt/GDP,and interest rates. As these 3 things will always return to baseline in the future this part of asset inflation must be given up in the long run. In 2007-2009 years of asset inflation corrected very quickly.The inflation in things will not likey return to baseline as it is determined more by any excess government deficit over the rate of productivity gain.The Fed should have been adjusting rates based on debt/gdp and a lot of losses from boom/ bust would have been eliminated



To: bart13 who wrote (109483)1/4/2015 6:20:27 PM
From: RJA_  Respond to of 219967
 
Uh oh...



To: bart13 who wrote (109483)1/4/2015 6:29:09 PM
From: Elroy Jetson  Read Replies (2) | Respond to of 219967
 
That's a pretty clever solution. The Fed is requiring banks to dramatically increase their reserves to accord with Basel-III while expecting their loan output to remain the same.

Letting them pledge their assets on reserve at the Fed solves a lot of that problem.

Too bad there's not much demand for loans, which is the real bottle neck.


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