The Traderszone Network

Published in TZ Latest News 17 May, 2014 by The TZ Newswire Staff

Citi On Bubbles, Broken Feedback Loops, & Bricks-On-Elastic

Normally, prices are self-limiting, notes Citi’s Matt King: yields rise – inflows hit – prices rise – yields drop – outflows hit – price drops, and back to yields rising. But, it appears for now that we are in a positive feedback (or hyperbolic) loop, where – thanks to central banks pushing too much money to chase too few assets – prices rising implores inflows creates “higher returns” which in turn encourages more inflows (as risk is ignored).

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