Yesterday I posted a more complicated NaviMap and offered only a cryptic write up on it.
The NaviMap above was created before the one in yesterday's post. The most important boxes is this NaviMap is the reinforcing loop between Box 2 and Box 4a. Box 4a is in blue to suggest that at the time of creating this NaviMap and even now, it is an objective governments hope to achieve in their effort to shore up the financial system.
Similar to the NaviMap from my previous post, if Box 3 appears before the virtuous cycle between Box 2 and Box 4a materializes, then this would lead to the "New Normal". Box 2 and Box 4a represents the revival of the "Old Normal" when people were making money hand over fist.
Inflation (box 3) will force monetary authorities to rein in liquidity or completely lose credibility. They will do it regardless of the political costs.
Another scenario is the "Old Normal" would last briefly, acting as a big bear trap for many investors. Box 3 will appear and bring the party to a premature end heralding PIMCO's "New Normal".