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Since the spring of 1994 I have worked on the fact that the secular downward trend in long-term yield would, at some point, bring a market crash.
I have resolved the famous Greenspan Conundrum as I discovered that long-term yields decrease with the increase of income/wealth gap. Hence income distribution is an important factor of macro economic development.
I have developed a model of the yield curve that describe long-term yields as options on shorter term yields.
My conclusion was that when a "inverted' yield curve, as it would necessary be, would return to its fair value it will trigger a market crash which under the circumstances of a 0% short-term interest would be of major consequences.
OpEd News Member for 788 week(s) and 4 day(s)
16 Articles, 0 Quick Links, 32 Comments, 5 Diaries, 1 Polls
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5 Diaries
Thursday, December 2, 2010
Le Run on the Bank SHARE
To make us more effective I will particularly focus my efforts on the French bank which is the most fragile in defence due to its position in the derivatives markets, Société Générale.
Sunday, September 26, 2010
A Tract on Monetary Reform: Fiscal Policy SHARE
As the economy is going down the drain and we have reached Keynes' Liquidity Trap economists have called a long forgotten and defunct economist, John Maynard Keynes, to the rescue. However from left to right none have really understood how it works.
Sunday, September 26, 2010
Tract on Monetary Reform: Monetary Policy SHARE
Conventional or non Conventional Monetary policy can't work. It is easy to understand why. The purpose of monetary policy is to increase investment. The problem we have now is precisely that there are too many idle investments for the prevalent demand.
Wednesday, May 5, 2010
A Keynes' Beauty of the Beast Contest. SHARE
This is an experimental game to check the validity of John Maynard Keynes assertion who said that professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole;
Saturday, February 27, 2010
Fiat Lux Pacem: Issue #001 - The Wealth of Nations. SHARE
KO's Peace for NWO. Against the Economic and Financial Consequences of Irrational Exuberance. is my purpose to shed the light on my proposition to avert the economic and financial consequences of Irrational Exuberance as soon as this one will appear evident to the general public.
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