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2021-11-16

2005 Alan Greenspan complained of a conundrum

 He had hiked the Fed’s target rate six times, by a total of 150 basis points, and yet he had barely budged the 10-year Treasury yield. 

It remained steady, and continued its gently declining trend.

 A quiescent 10-year rate enabled the disastrously over-ambitious structured credit monstrosities that would bring down the economy. 

Now we have a new version of the conundrum.

Not even this inflation spike can dislodge the most reliable and most important trend in modern finance

John Authers Bloomberg 16 november 2021



Conundrum at IntCom - 2005 and all that



Bill Gross  says stimulus and low interest rates have created ‘dangerous’ situation  

... financial euphoria in everything from stocks to digital assets like “non-fungible tokens”

Gross sceptical inflation would stay this high or accelerate further predicted, however, that it was likely to stay well above the Fed’s 2 per cent target for the foreseeable future.

“One of these days, one of these years, or one of these decades, the system will collapse, because capitalism depends on savers saving and investing.”

Robin Wiggleswort FT 16 November 2021



Bill Gross at IntCom




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