Note from Tim: the Sloper known as Silver Singularity was kind enough to construct an epic post, which I am breaking into two parts. The second part, which is a doozy, comes out tomorrow. Everyone be sure to thank SS for his post, and encourage him to keep at it!
Let’s start by the guiding principle. What can we expect from a leveraged economy in a rising interest rate environment using current and past data/cycles?
Having lived my whole career as a trader in a low interest rate environment combined with monetary stimulus and listening for a long time to people like Peter Schiff, I was finding myself in the camp that the FED and the ECB were toast.
That is to say they, too, were in the same predicament as the BOJ and couldn’t raise interest rates anymore… even a tiny bit.
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