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The Moneyless Illusion: Why Risk Is Being Dangerously Underpriced By The Everything Bubble

Summary:
Early on in the global government finance Bubble, I advanced the concept of the “Moneyness of Risk Assets.” This was an evolution from the mortgage finance Bubble period’s “Moneyness of Credit” market distortion. The aggressive use of rate policy and central bank balance sheets/Credit to promote stock and bond price inflation nurtured the (central bank backstop-induced) perception of risk assets as safe and liquid stores of value (i.e. money-like). Over time, this had momentous effects throughout the markets, certainly including the booming ETF and derivatives complexes. http://creditbubblebulletin.blogspot.com/2019/05/weekly-commentary-ignore-them-then.html

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Early on in the global government finance Bubble, I advanced the concept of the “Moneyness of Risk Assets.” This was an evolution from the mortgage finance Bubble period’s “Moneyness of Credit” market distortion. The aggressive use of rate policy and central bank balance sheets/Credit to promote stock and bond price inflation nurtured the (central bank backstop-induced) perception of risk assets as safe and liquid stores of value (i.e. money-like). Over time, this had momentous effects throughout the markets, certainly including the booming ETF and derivatives complexes.

http://creditbubblebulletin.blogspot.com/2019/05/weekly-commentary-ignore-them-then.html

David Stockman
David Alan Stockman (born November 10, 1946) is a former businessman and U.S. politician who served as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

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