Of Two Minds

Who’s left to buy overvalued houses? Too few to prop up bubble valuations. If as many posit the Federal Reserve has an unstated mandate to generate a “wealth effect” by propping up housing, they’ve managed to create a no-win situation.

And what happens next? Bubble symmetry: valuations fall at the same rate as they rose, declining back to the starting point over a roughly equivalent time duration.

Be careful what you wish for, because currencies are not abstractions we ponder, they are commodities that serve real-world functions that place demands on the currency as a mechanism of trade, trust, value and risk.

Yes, I’m rattling the begging bowl.
Beneath the veneer of normalcy, things are no longer working like they’re supposed to. Am I the only one who senses this? >

In a system maintained by ever-greater extremes, confidence erodes very quickly once the next extreme fails to move the needle.

This is how we’ll end up with severe shortages of truly skilled labor and high unemployment of those who lack the necessary skills.