In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:
- No wonder people are confused
- Sloppy journalism abounds in the general media
- The world's addiction to low rates
- Prolonging & worsening our predicament
- Spanish storm clouds
- Insolvency is becoming increasingly clear
- Predicting the Fed's next move
- Will there be action before the election?
Summer's calm is now ancient history, and a foreboding instability is growing in the markets. The protracted, suppressed-interest-rate environment has lasted so long that market forces are beginning to boil over in points of weakness faster than central planners can contain them (e.g., Spain). Not only have financial exchanges become addicted to low rates, they have also become dependent upon expectations of ever more liquidity. If one of these two fails to materialize, markets will go into withdrawal shock – with drastic implications.
Inaccurate and/or sloppy reporting is making it harder than ever for the average person to understand what's going on in the economy. Over- and under-exaggeration is keeping investors on edge, confused, and misinformed. None of these is conducive to good decision-making.
In today's over leveraged markets, keeping interest rates low is Global Priority #1. Yet the cost of this is hidden and high. Low rates make it hard to see the true risks; in fact, they increase them.
by rje