Markets Scream For Stimulus As Deflation Comes For South Korea, Japanification Grips Europe
If you're inclined to couch everything in hyperbolic terms, Mario Draghi faced a veritable "rebellion" at the latest ECB meeting. "Rebellion" is probably a bit strong, considering we're talking about monetary policy deliberations, not the storming of any ramparts, but regardless, there was dissension.
But the latest read on inflation seemingly underscores the extent to which Europe is trudging slowly down the road to Japanification, which ostensibly makes the case for more monetary easing, in l
“Germany unveils $60 billion plan to fight the climate crisis”
I take that back. Not big enough.
For some reason, this comment resonates like a loud gong, i.e., markets are unwilling to accept how useless QE-type stuff has been and thus to not be willing to accept the current state of institutions Too Big To Fail (whom all failed a decade ago). The BIG question is, if central banks haven’t helped economies and if corporations have not re-invested in future growth and if we have really stupid and corrupt people and parties running the show, is there any chance that things will be ok?
If lowering the interest rate from 5.25% to essentially zero had little impact on the economy in 2008-09, why should we think that lowering rates by 0.25% will have any observable effect? Large corporations are still sitting on hoards of cash: it’s not a lack of liquidity that’s stopping them from investing.
https://cgt.columbia.edu/news/stiglitz-trumps-deficit-economy/
Indeed, you get at the essence of this rentier economy. Ironically, this model does seem to have self-sabotage baked in, in one way or another. The lack of investment in workers or the future at some point has to redound back to corporate toplines, because ultimately they need consumers, 90% of whom are close to insolvency, to continue to buy their, in many cases, non-essential products.
You and Viciss…. are spot on …So what part of idiotic does the rest of this system not get..?? Equities edge higher , likely not for long but I have said that before….