tag:blogger.com,1999:blog-5908830827135060852.post2343314740063316757..comments2024-03-01T02:40:14.946-05:00Comments on Bond Economics: UncertaintyBrian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-5908830827135060852.post-34188919379230127472020-02-29T11:37:06.891-05:002020-02-29T11:37:06.891-05:00Here is my thinking:
Bank borrowing creates incre...Here is my thinking:<br /><br />Bank borrowing creates increased wealth at the rate of 1:1 (i.e., one bond per dollar loaned).<br /><br />CB borrowing/lend event creates increased wealth at the rate of 2:1 (i.e., one bond AND one dollar created per event).<br /><br />So, so long as government continues spending based on borrowing, the money supply/wealth continues to increase. The coronavirus has no role in this evolution.<br /><br />On the other hand, the virus-caused-pattern-disruption seriously unsettles steady-state valuation normal's. In general, supply and demand will both diminish in scale. This should result in less return/profit to ownership.<br /><br />In summation, equities should earn less at the same time that there is an increasing supply of money/wealth awaiting apportionment. Far and away from being a steady-state situation!Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.com