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Booms, Busts And (No) Recoveries
If we've learned anything from the post-crisis experience (and there's a veritable mountain of evidence to suggest we haven't), it's that money printing and accommodation in general in the form of ZIRP and NIRP are not a magic bullet when it comes to catalyzing a sustainable and/or robust rebound in global growth and inflation.
It's true that without central bank accommodation, the system would have likely collapsed entirely an outcome that, unless you are a true believer in the idea that the w
Economies must have winners and losers according to your ability to prosper and survive by being a well run company or not. This is not that. Companies that have no business (pun intended) surviving are constantly propped up, where is the fair and (laugh) free market forces, gone baby gone. Life is good for the connected and fu*ked for those (most of us) who are not. This isn’t an economy it is a debt induced ponzi scheme with no inflation, right.
PS: The World is One Big Over-leveraged Corporation That is a Financial Basket Case. (Don Durrett)
Consider the quote from the above article…..
“It’s true that without central bank accommodation, the system would have likely collapsed entirely an outcome that, unless you are a true believer in the idea that the world could survive a true reset without devolving into chaos, simply wasn’t a viable proposition.”
A corrupt money system that feeds an elite might have collapsed..but so what? In the short term the pain from loss of pension monies, jobs and stock/bond portfolios would have been large. But, the assumptions and economic system for building our future would have been much stronger and based on something other than hundreds of billions in subsidized stock buybacks, $4 million dollar 3 bedroom homes in Palo Alto and a reward structure where 1% of the people possess 80% of the wealth. Growth might be whatever it is…with companies and businesses that produce what people want doing well and those that feed off cheap loans and development of assets that are perpetual losing propositions (the entire shale industry) never getting off the ground.
Of course…you wouldn’t have a 22,000 Dow and real estate loans wouldn’t be 3.5%..we might even have deflation rather than disinflation and we’d have already given up the notion that devaluing the currency was a worthwhile endeavor.