Captain's Quarters

[JD400]

Is a Huge Crisis Once Again Bearing Down On Us?
John Mauldin | Monday, 17 July 2017 12:34 (EST)

Financial politicians (aka central bankers) have a long history of saying the wrong things at the wrong time.

Far worse, they simply fail to tell the truth. They lie because they’re afraid of the impact the truth will have. This is a problem, because markets can’t function on false information, at least not forever.

They also face enormous pressure to “do something,” even when the right thing is to do nothing and just let the market clear.

Janet Yellen’s recent reassurance regarding the likelihood of another financial crisis was likely one of those lies. Here is the full quote.

Would I say there will never, ever be another financial crisis? You know probably that would be going too far, but I do think we’re much safer, and I hope that it will not be in our lifetimes and I don’t believe it will be. [emphasis added]

I disagree with almost every word in those two sentences, but my belief is less important than Chair Yellen’s. If she really believes this, then she is oblivious to major instabilities that still riddle the financial system.

That’s very worrisome.

Central Bankers Have Hit a Brick Walk That They Have Built Themselves

The present challenge arose because our central bank monetary heroes allowed QE, ZIRP, and in some places NIRP to go on far longer than was wise ..........

continues here

https://www.equities.com/news/a-crisis-of-historic-proportions-is-once-again-bearing-down-on-us