- Post-crisis growth, mild as it’s been, has been largely a function of debt, which central banks encouraged and enabled. The result was inflated asset prices without the kind of “recovery” seen in previous business cycles. Interest rates, i.e. the cost of debt, thus became critical.
With rates now moving up again, premium asset prices are losing their raison d’etre and will stabilize and eventually fall. Peter Boockvar says this, not the conventional business cycle, is what will set off recession. That’s key. Lower asset prices won’t be the result of the next recession; they will cause that recession.
I wondered if I'd miss the next installment in the series. Hadn't been posted here yet.
I love the "hopeless, but not serious" quote. I think it resonates me more today than it would have a decade ago. I've been thinking about Bitcoin. It was created in the dust of the Great Recession as an escape from fiat. Evolution happens on all levels. Perhaps bitcoin is an economic phenotypical variance that is finding advantage in some economical niches. Perhaps these niches are themselves expressions of an evolution. We might assume that bitcoin happened after some developments in math, software, hardware, and network technology made it possible, but maybe that isn't the most correct way to look at it.