‘Policy Failure Is Here’ (Just Give Me The Medicine)
Can you drown a virus in liquidity? Or, can you subject a biological threat to death by a thousand rate cuts?
Those are objectively silly, rhetorical questions. But we're implicitly asking them right now.
Because, in a world where central banks have been the only game in town for a decade, and in the face of recalcitrant politicians who are reluctant to unleash fiscal stimulus for fear of raising the ire of whichever Olympian deity hurls lightning bolts at governments that spill red ink, all w
As mankind progresses, we are seeing that disposable income, as an important driver, gives way to disposable consumption. The result is a much higher probability of depression in the fiscally intimidated developed world. USA infrastructure condition reveals that a lot more is wrong than people who could get fired for telling the truth will ever reveal.
And this pandemic is a practice run. It could kill millions but mostly the old and sick. But a low percentage. A pandemic such as ebola would kill as much as half of those that contract the disease if there is no vaccine readily available. The lessons learned here are absolutely critical if we are to survive the next one.
This is a great post mostly because it is a testimonial to H ….and his literary skills…( that’s one of the many reasons to be a member)… Anyway some of us have been saying just what this content is about but we are less eloquent ….What is going on here is a microcosm of the whole of civilization and it’s inevitable transition and progressions in the realm of economic , political and technological advancement..
A wise man once told me it is good we only live so long because the ability of the human is to withstand just “so much change in a lifetime “
I’m curious about something. Why are we not hearing about how this economic situation could indicate a deflationary period? Consumption falls, prices fall, expectation of future prices falling further reduces consumption further. For example, I’m not going to buy a car now because I expect people around the world to take a defensive mindset financially and not buy a car and as a result I expect dealers to have excess inventory this summer or fall. I know you can’t just take micro-economic thought experiments and extrapolate macro-economic conclusions so I’m hoping someone more informed than myself can walk through what deflation would look like. Seems like interest rates on Treasuries dropping to the floor shows expectation of deflation. Thx for all the constructive thought exchanged here!!!
I think you hit the nail on the head.