Rusell Has been ahead of curve , Market historian who got most of his calls right but not the timing
Rusell Napier comments ….. how money is actually created.
“Money is created by an extension of commercial, by balance sheets. It’s not ultimately created by the federal reserve, the federal reserve has long sort of controlled those commercial banks, and by controlling commercial banks the way one would control a team of horses, manages the supply of money. But when that is too high, there is at least a portion of the population, probably not people in private equities but homeowners who consider it prudent to begin to reduce their leverage and that begins to get more true the older we get, and we have this baby boom bulge going through the system, and we have a conundrum in the global economy, if I could quote from the maestro, and the conundrum is ‘how do we create money without creating debt? Or if we’re not going to create debt, because so many portions of the system or over-averaged and want to de-gear and if banks find it very difficult to grow the banks sheets because so many of their customers want to reduce their debts, how to we grow money?’ And it’s a question that’s not really been answered, so what I see every day on my screen, I see lots of evidence of more debt, primarily outside the banking system through the bond market, but not a lot of credit being created by the banks and therefore not a lot of money. And if you constantly add in more debt without the money that inevitably stimulates or is necessary for economic growth, in a modicum or a reasonable rate of inflation, you’re gonna get yourself into a real problem, and I think that’s the real problem that’s shaping up. In terms of the time of that, it’s incredibly difficult, but this inability of the banking system to grow, which I think is the man-driven not supply-driven, is something that the authorities, I think, have not paid enough attention to”
Fantastic Interview from my favourite Analyst Rusell Napier who covers the following topic in detailIs
1.US Dollar bull market over?
2.Secular treasury bond bull market
3.The coming pension crisis
4.Inflation expectations
5.Outlook for precious metals
6.European exit contagion