{"id":12530,"date":"2015-09-23T05:56:49","date_gmt":"2015-09-23T10:56:49","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12530"},"modified":"2015-09-23T05:56:49","modified_gmt":"2015-09-23T10:56:49","slug":"feds-doom-loop-locks-us-on-course-for-another-crisis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12530","title":{"rendered":"Fed\u2019s \u201cDoom Loop\u201d Locks Us On Course for Another Crisis"},"content":{"rendered":"

Fed\u2019s \u201cDoom Loop\u201d Locks Us On Course for Another Crisis<\/a><\/h3>\n

Too Much of a Good Thing<\/strong><\/p>\n

PARIS \u2013 We\u2019ve seen at least three articles explaining why the Fed failed to increase interest rates last Thursday. One says Goldman Sachs is calling the shots now. Another says China has the Fed under its thumb. Still another claims the Fed is a victim of its own policies and is now stuck in a \u201cdoom loop\u201d\u2026<\/p>\n

All of them are right. All of the powers that be \u2013 including the Fed \u2013 want the party to continue. All know that if the Fed starts going around and turning off the lights and unplugging the music, the party is over.<\/p>\n

\"romans\"Partying in ancient Rome \u2013 against the wishes of the guests, this party ended too \u2026
\nPainting by Thomas Couture<\/p>\n

As we tried to understand in our recent book,\u00a0Hormegeddon: How Too Much of a Good Thing Leads to Disaster<\/em>. Public policies create their own support. When they\u2019re big enough, and go on for long enough, they become unstoppable.<\/p>\n

On Monday, the Dow rose by 125 points, recovering just under half of Friday\u2019s\u00a0losses. But the bigger picture shows a stock market cut off from reality \u2013pretending to \u201cparty on\u201d while desperately trying to ignore that the rest of the revelers have gone home.<\/p>\n

A report in the\u00a0Financial Times\u00a0on a conversation with hedge fund manager John Burbank of Passport Capital begins:<\/p>\n

\u201cThe world economy is locked on a course toward an emerging markets crisis and a renewed slowdown in the U.S., despite the Federal Reserve\u2019s decision last week to hold off on a rise in rates.\u201d<\/p><\/blockquote>\n

\"USDBRL(Weekly)\"<\/a>The Brazilian real, weekly. The currency of the \u201cB\u201d in the famous \u201cBRICS\u201d acronym already appears to be in crisis. Only a few years ago, Brazil\u2019s finance minister was still complaining about its strength\u2026 click to enlarge.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

<\/div>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Fed\u2019s \u201cDoom Loop\u201d Locks Us On Course for Another Crisis Too Much of a Good Thing PARIS \u2013 We\u2019ve seen at least three articles explaining why the Fed failed to increase interest rates last Thursday. One says Goldman Sachs is calling the shots now. Another says China has the Fed under its thumb. Still another […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,6190,130,1732,303,305,312,376,1154],"class_list":["post-12530","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bill-bonner","tag-china","tag-emerging-markets","tag-fed","tag-federal-reserve","tag-financial-crisis","tag-goldman-sachs","tag-interest-rate-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12530","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12530"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12530\/revisions"}],"predecessor-version":[{"id":12531,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12530\/revisions\/12531"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}