Thursday, November 7, 2019

Becoming a third world nation

Terms of trade have changed.  The end part where loans deviate from deposits is an economy adapting to a contraction, becoming a third world country.

The separation means the central bank is dealing with great price volatility and has to carry much great market making risk. 

Third world country dedicated to digging holes and exporting raw materials.  Overall it means higher price volatility along with a deflationary trend.

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