One who intends to leave others better off for his having existed.

1/25/14

What is a Minsky Moment?

A Minsky moment is a sudden major collapse of asset values which is part of the credit cycle or business cycle.

Sudden collapse via a minority perceived set of imbalances
that with enough of the population figuring it out,
affects a change in the confidence/belief/perception to the point
that a majority becomes aware in a short amount of time.

Such moments occur because long periods of prosperity and increasing value of investments lead to increasing speculation using borrowed money. The spiraling debt incurred in financing speculative investments leads to cash flow problems for investors. The cash generated by their assets no longer is sufficient to pay off the debt they took on to acquire them.

The banks lent too much,
consumers borrowed too much,
the Federal Reserve and other central banks bailed out their patrons with funny money,
reflating a big bubble into a huge, global, simultaneous government sponsored liquidity fest.

Now we are left with the consequences,
as the periphery emerging markets suffer from our exported inflation.

Losses on such speculative assets prompt lenders to call in their loans. This is likely to lead to a collapse of asset values.

Meanwhile, the over-indebted investors are forced to sell even their less-speculative positions to make good on their loans. However, at this point no counterparty can be found to bid at the high asking prices previously quoted. This starts a major sell-off, leading to a sudden and precipitous collapse in market-clearing asset prices, a sharp drop in market liquidity, and a severe demand for cash.

http://en.wikipedia.org/wiki/Minsky_moment
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Cash, as in American dollars, which looks like why the US dollar is rising,
as emerging market currencies get crushed.

As the current owner of the world's reserve currency,
we get to take over commerce with US dollars in Argentina and Venezuela etc... economies
after the respective governments of said country's hyper inflate from trying to maintain control
just like Zimbabwe.

Then said countries need to have a means of commerce to do business,
so our over printing money is absorbed by those in other countries,
leaving the US dollar stable.

We have engaged in economic war,
which may very well lead to military responses from those we have
and are about to indenture even more than we have done so to date.

I would rather be a US citizen than not at the present moment in industrialized history.

The rest of the world financed the artificial stability we maintained since mid 2009,
by having to trade in US dollars
and now some of the rest of the world may have to accept the destruction of their currencies.

Darwinism can be a bitch.

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