- The thesis is one of secular change - an extraordinary multi-decade Bubble period transitioning (in a highly destabilizing manner) to a most uncertain New Cycle. A historical perspective is crucial.
- Financial conditions must tighten, and financial markets are a key monetary policy transmission mechanism. And the Fed today has little clarity on how far this tightening process will need to go.
- Greenspan came to relish the incredible power he could wield over system credit, market liquidity, financial conditions and economic development.
For further details see:
Weekly Commentary: More On The New Cycle