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‘I’m A Minsky Moment, I’m Not THE Minsky Moment’

Listen, I mean there's good news and there's bad news and then there's one simple question.

Listen, I mean there's good news and there's bad news and then there's one simple question.
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2 comments on “‘I’m A Minsky Moment, I’m Not THE Minsky Moment’

  1. We have seen this story before. It is not just a coincidence that tax cuts for the rich have preceded both the 1929 depression and the 2007 financial crisis. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929, there were over 600 automobile manufacturing companies in America) caused the depression that made the rich, and most everyone else, ultimately much poorer.
    As I said in: MORL’s Yield Climbs To 23.2% As A Result Of The Highest Monthly Dividend In More Than 2 Years https://seekingalpha.com/article/4133734
    …The quandary for investors can be described as someone who has seen the first and last page of a book, but does not know either how long the book is or what happened between the first and last pages. We know that a massive transfer to the rich will happen. We know that the middle class has a much higher marginal propensity to consume than the rich. We know that initially the rich, or if you rather the job creators, use their additional after-tax income to invest. This extra investment initially boosts securities prices. The higher prices securities for securities enables investments to occur, that might have otherwise been undertaken. These can range from factories, shopping centers and housing. What we don’t know is the path that equity prices and interest rates will take between the enactment of the tax shift and the eventual financial crisis or other event occurs, at which time the massive excess of supply of loanable funds as compared to demand for loans will push risk-free short-term interest rates down to near the lower bound, as was the case during the 1930s, in Japan for decades and in America since 2008…”
    https://seekingalpha.com/article/4134063

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