While much of the media remains focused on Trump and trade, the greatest threat to the Chinese economy may be reckoning with a massive financial bubble from within.
The fact that the most conservative investors are being forced to purchase bonds of nearly bankrupt companies for virtually no yield is not a success of monetary policy nor a tool for growth.
The market probably interprets correctly that the European Central Bank will become even more dovish under Lagarde. This will encourage more risk in the financial system.
A major factor that can explain the apparent contradiction between weakening so-called fundamentals of today — and the stock market's continued march upward — is changes in monetary liquidity.
Vikram Mansharamani’s second edition of Boombustology: Spotting Financial Bubbles Before They Bursthas all the great insights from the first edition plus a foreword by James Grant.
It is not easy to change the failed policies of the Kirchner era without recognizing the enormous monetary and fiscal hole created by the previous administration.
