Ben Bernanke has announced what many have been speculating: ‘Operation Twist,’ meaning that the FED will sell $400 billion of bonds in the 0-3 year segment and buy $400 billion of long-term bonds in the 6-30 year in an effort to push interest rates even lower. Many analysts believed the Fed might actually add to [...]
Just as housing moves to reach its price to income ratio, individuals are simultaneously trying to deleverage as US household debt levels work their way back towards the long-term trend line. This is completely in line with Richard Koo’s book, The Holy Grail of Macroeconomics, where he explains the signs and outcomes of excess debt levels [...]