Stimulating Into a Bubble

By Ray Dalio – X

Did you see that the Fed’s announcement that it will stop QT and begin QE?  While it is described as a technical maneuver, any way you cut it it’s an easing move that is one of my indicators to pay attention to in order to track the progression of the Big Debt Cycle.

At this time it should not escape our attention that when the supply of U.S. Treasury bonds is larger than the demand for them and the central bank is “printing money” and buying bonds and the Treasury is shortening the maturities of the debt being sold to compensate for the demand shortfall in long-term bonds, these are classic Big Debt Cycle late cycle dynamics.