The Pin To Pop This Mother Of All Bubbles?

Global macro economic data has been weak for many years, but there’s now a very real chance of a world-wide recession happening in 2017.
Why? A dramatic and worsening shortfall in new credit creation.
The world’s major central banks have, again, done the world an enormous disservice. Instead of admitting that maybe/perhaps/possibly the practice of issuing debt at more than twice the rate of underlying economic growth was a very bad idea over the past several decades, they instead doubled down and created an even larger debt monster to be dealt with.
The resulting global asset price bubble — or, more accurately, set of nested and incestuously intertwined bubbles — can collectively be called the Mother Of All Bubbles (MOAB). None has ever been larger in history.
As with all prior bubbles, it shares the collective delusion that there’s such a thing as a free lunch. History has seen many attempts to eat this elusive meal, with each generations convinced that they were the chosen ones who could finally crack that nut.
So, dutifully, our central bankers have tried, and tried again, to deliver that free lunch — i.e. to print up prosperity.
But, alas, prosperity cannot be printed out of thin air. All that can be accomplished by central bank slight of hand is a transfer of wealth. Central banks steal from the many to give to the few. They are the reverse Robin Hoods of our day.

This post was published at PeakProsperity on Friday, June 16, 2017,.