“There’s a point where the Federal Reserve is going to have to pull out a bazooka,” Minerd said in an interview. “And I think the option of buying stocks on the part of the Fed is on the table.”
The stronger dollar era may be on borrowed time.
Stephen Roach, one of the world’s leading authorities on Asia, is worried a changing global landscape paired with a massive U.S. budget deficit will spark a dollar crash.
“The U.S. economy has been afflicted with some significant macro imbalances for a long time, namely a very low domestic savings rate and a chronic current account deficit,” the former Morgan Stanley Asia chairman told CNBC’s “Trading Nation” on Monday. “The dollar is going to fall very, very sharply.”
His forecast calls for a 35% drop against other major currencies.
Politics has changed significantly in the past decade, and governments have found a new way to create money without central-bank help. A new inflationary era might be on the way, and if it is, the markets have got it completely wrong.
The Federal Reserve is proposing an extension of its emergency loan program to include U.S. nonprofits like universities and charitable organizations.
Not only is the facility a legally questionable moral hazard, it is also nothing but an asset prices support system that keeps zombie corporations alive.