Sunday, August 24, 2014

safe assets

After Clinton, Greenspan and the tech stock boom/bubble balanced the budget there was a shortage of safe assets, to the private market in collusion with the ratings agencies created the shadow banking system with mortgage-backed securities and sold them as safe.

Bernanke has said he might have been wrong to call this a "global savings glut." There's something else going on on the flip side, a dearth of investment and asset prices move higher. Interest rates move lower. But Beckworth says interest rates remain the same, it's just the risk premium goes up.


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