A monetary system that allows the creation of money out of thin air is vulnerable to the fits of credit expansion and credit contraction. Periods of credit expansion typically occur over many years and even decades while the phases of credit contraction happen like sudden implosions. The monetary policy makers tend to promote the prolongation of credit expansion because they fear deflation.
The Wall Street Journal reports today that Twitter’s senior management and Elon Musk are in the final stages of agreeing on terms for Musk’s proposed takeover of the social media platform. Musk had announced on April 21 that he had $46.5 billion lined up—half in cash, half financed by his bankers Morgan Stanley, Barclays, and Bank of America—for a purchase of the company.
One of the most important days on the calendar is little more than a week away: May 4. Next Wednesday, Federal Reserve Chair Jerome Powell may very well deliver a Keynesianesque double-feature, announcing various asset bubbles will be popped and a nail in the coffin is to be delivered into the economy, courtesy the Fed.
