Mechanisms of a Complex Adaptive System

Written By Cole Brooks

Why is it so difficult to predict the future? Because we are living within a complex adaptive system!

Raoul Pal and Michael Howell discuss their framework for viewing the financial system and how it might feed into higher asset prices over the medium term (12-18 months):

  • Policy makers must supply liquidity to allow debtors to refinance their debts.

  • Policy makers can drive nominal GDP higher using liquidity and deficit spending.

  • An outline of several possible channels through which liquidity can be pushed into the global financial system.

  • Assets that are more scarce than currency are likely to rise in price.

Cole Brooks
Previous

Market Update and Return from Vacation
Next

Indexation, Reflexivity, Flows