The destruction of savings, which perversely is the policy intention, is a consequence of interest rate policies pursued to their Keynesian endpoint with social implications too important to overlook. Because they are not on any central bank’s radar, the misery of the loss of income for small savers is ignored along with the damage to private sector pensions and the higher insurance premiums compensating for lower investment returns. The whole thing is a deepening morass, but it seems central bankers are determined to continue with these policies nonetheless.[1]You know we're toast when the financial leaders all believe in free money (see below). Have none of them heard of the "free lunch" insight into human economic behavior? I gather the Turks have a saying, "Nobody loves you for your baby blue eyes." Or, stated in up-to-date terms a la Google, Facebook, and the rest, if something is "free" to the citizen it's likely that it's the citizen who will be footing the bill. And we are on board with this, make no mistake. The government does the most damage with its embrace of "free money" but we take the crumbs from that and don't insist on "real" economic policy that focuses on production. There are obvious stirrings of great unhappiness. Hence the obvious, strong, but still rather inchoate appeal of "MAGA." Tea Party anger but more.
Inflating the quantity of money in circulation has become the most important objective for monetary policy. The other stuff about interest rates, quantitative easing and yield curve control is little more than supporting flimflam, even diverting attention from the inflation objective which reeks of confirmation bias. Confirmation bias is reinforced by the increasing dependency of the state on this form of financing. The fact it is apparently free money, justified by its alleged stimulative qualities, makes monetary inflation highly addictive. An understanding of the damage it causes is casually dismissed and along with it the painful alternative of cutting government spending to escape a downward spiral into the financial gutter. As an inflation addict, the US Government is edging closer to that gutter, now with the addition of an intensified socialistic modern monetary theory adopted by the Biden administration.[2]The inevitable massive loss of small business and jobs that is just around the corner, on top of the sleezy, giant middle finger to American patriots in the form of Zimbabwe-scale election theft, will rip the face off of all of this. And the Democrats will, you may be certain, blame it all on "capitalism." It's not sure what kind of "reality" will take the stage. It won't be anything like our current fairyland "Overton window."
Mr. Macleod's article is worth your time. If for no other reason that it serves up a heaping dish of what passes for normal in the world of banking, finance, investment, and government policy. That's not a criticism of him just an observation that the "debate" among the uber technocrats is surreal, and he does a good job in describing it.
I don't see any marker buoys laying out the passage to safety. Anywhere. And these fools lecture us about "climate change" and "Great Resets." I can't find the exact comment but I liked what a gent said to the effect that the political class has managed to destroy one of the most successful nations nations ever in two generations or so. Complete joke status achieved.
Fasten your seat belts. Some turbulence ahead folks. Even for the people in First Class.
Notes
[1] "Monetary Inflation: The Next Step...." By Alasdair Macleod, ZeroHedge, 2/28/21 (emphasis added).
[2] Id.
4 comments:
In the past I pointed to Mugabe as the pattern to expect in future. Nobody ever said anything about it one way or the other. I figured I was talking to the wall. Now that November 3rd is history, I pray you will have a far better response. I'm leaving this one today so that you will have at least one response.
Thanks. It's perhaps to single out Zimbabwe since the very structure of the E.U. is a non-democratic joke. As were a couple of those end runs around the voters whereby Ireland and another nation I can't recall just now "became members" of the E.U. by the mechanism of a treaty when the referendum process resulted in rejection of membership.
In the military there are real incentives to look out for the welfare of the troops. Almost uniformly the civilian leadership of the Western nations show contempt for the welfare of their people. Foreigners and minorities? Mais oui. Sacred objects of their concern.
Contempt for the hoi polloi has always been a trait of the worst aristocrats. Back in that age there were always a few who might deign to behave more benignly, but the neos instinctively marginalize any who seem inclined to benevolence because they know it exposes them too much. They are determined that all in office be held all to their "standards," which would -- in another age -- be recognized as demonic.
Good point you raise about military treatment. That this ruling class has fed contaminated food to the National Guard deployed in DC demonstrates how far afield they have strayed from normalcy that they would do that. Lenin would never have succeeded doing anything like that to the Navy that provided him his initial foothold. Natural Law beckons. It just seems like an eternity for that darned pendulum to swing back. The only thing that could be delaying it is that our age also contains not nearly enough who are bold enough to take advantage of that huge potential energy built up.
You constantly point out the impending economic fiasco. That is certainly part of the potential energy in that pendulum. Nobody with any sense sees anything positive after the crash whatever the trigger. Do you suppose everyone, EVERYONE, is walking on eggs?
In this instance, the aphorism that comes to mind most is "there are no atheists in foxholes."
I noticed the class attitude in London many years ago. It was mildly unpleasant though I knew I'd never have to contend with it. The union hostility depicted in the grand movie "Brassed Off" seemed excessive to me too. I thought Thatcher was correct to deal with uneconomic coal mines but the pain was real. However, a fine example of taking the bull by the horns instead of our accursed can kicking. Different situation now but same principle - for gosh sakes do anything except extend and pretend.
I keep expecting that each new leftist lunatic initiative will finally be the straw TBTCB. But it appears that natural law is not something that motivates people to act. It just describes the essentials of harmonious living and what is normal. Rather like "maintain your car or you'll be sorry." Well, you didn't say it motivates anyone.
The absence of leadership is bizarre. The useless GOP manages to be a distillation of feebleness. Romney did well in his first debate with Obongo and then embraced his inner pussycat. Any people with vision seem only to be commentators. Portnoy stands out just because you can tell he gives a damn about others. Radically different!!!
Yes, I do harp on the I.E.F. It's a bit ironic because I consider myself to have no sophisticated understanding of finance, investing and money. But how can anyone ignore what's going on when one can see that the deception, mismanagement and destruction cannot be avoided. Maybe arithmetic is central to natural law or the natural order. In Chinese history dynasties lost the "mandate is Heaven" in that they just ceased to govern or git 'er done. The populace just spontaneously gave up on it. No one leader could prevent that but new ones appeared to pick up the pieces. Ergo, first collapse. Then leadership. An unknown. Like Portnoy.
Walking on eggs presupposes awarenesses. With millions dutifully paying their cable bill and mouthing "honest election" I see very little awareness. Except that mouthy, delightful gal in Brooklyn.
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