Saturday, June 07, 2014


Excerpts from credit bubble report Doug Nolan

From Nolan

"The Fed did succeed in rejuvenating strong Credit growth. Q1 2014 NFD was reported at a Seasonally-adjusted and Annualized Rate (SAAR) of $2.113 TN – with NFD growth now above my $2.0 TN bogey for two straight quarters. Considering the degree of Credit expansion, the performance of the economy has been most unimpressive (Q1 GDP up SAAR $11.7bn). I’m further troubled by the composition of the recent Credit expansion. Over the past six months, the $2.0 TN bogey has been achieved with federal debt growth of SAAR $1.1 TN and total Business borrowing at about SAAR $940bn. I would argue that large federal borrowings coupled with corporate debt funding M&A and stock buybacks (“financial engineering”) provide the real economy little bang for the Credit buck. Indeed, the massive inflation of Fed Credit has chiefly fueled dangerous speculation and runaway Bubbles in securities and asset prices. The divergence between inflated asset prices and deflating fundamental prospects now widens by the week."

And " good luck with that"

"The European Central Bank’s plan is to lend to banks specifically to finance loans to business and the real economy. Good luck with that, with feeble return prospects in the real economy paling in comparison to outsized speculative returns so easily achieved in manic securities markets. "

**** let me add! nothing wrong with playing along with their game! making money long! but key point for us I do believe , is we have known from the get go how this would be achieved , and furthermore understand price to pay when party is over. That none of this is real, and all the ammo 
used to even get what we have, is sad because as stated, the money doesn't get into then REAL economy, good luck with that.

So when music stops, has it already in Europe....go ahead lower rates to below zero....good luck with that.