Another Stunning Long-Term Chart
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From a recent presentation(.pdf)
by Agustín Carstens, Bank of Mexico governor and chairman of the IMF’s
International Monetary and Financial Committee, via this item
at Wolf Street comes the chart below that, once again, reminds us all how far
removed the global financial system is from anything that could be considered
“normal”.
 
Carstens doesn’t oppose recent interest rate and QE policies by central
banks, but he is quite concerned about how it all turns out, summing things
up rather nicely by noting:
The crux of the matter is that financial risk-taking has been far more
responsive to unconventional monetary policies than real risk-taking has
been.
This would be less troubling (well, at least a little less troubling) if
not for the fact that the world’s most important central bankers in general
(and former Fed Chief Bernanke in particular) have never acknowledged that
“the reach for yield” even exists.
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