Albert Edwards Predicts Zombie Apocalypse
I take a relatively sanguine view of the Fed's foray into corporate bond buying.
That's not because I don't appreciate the moral hazard critique. On the contrary. It's because I appreciate it all too well.
This ship sailed years ago. When Ben Bernanke explained the mechanics behind the Fed's financial crisis response in a 2010 Op-Ed for The Washington Post, he couldn't have been any clearer. Here's what he said:
This approach eased financial conditions in the past and, so far, looks to be eff
MMT being a more realistic view of developed economies as they have developed in real time. Or Dalios war and gold. Time to drop pretend from extend and pretend. Extend and retend.
Growth is the only acceptable path.
Instead of trying to grab a bigger share of the existing global economic pie, the US has to focus on the opportunities to grow the total size of the economic pie and find growth for the USA through total growth rather than by going up against China to keep our current share.
Global population is 7.8B.
The US faces major structural impediments to growth above the rate established over the last decade.
The one variable that could significantly improve economic growth is productivity. Productivity gains require investment in material and human infrastructure, neither of which have been a focus of public or corporate spending for some time now.
The most plausible source of productivity gains in the foreseeable future is automation, which in turn is likely to increase precarity.
There are no easy or obvious solutions other than to patiently reinvest in America’s social and material infrastructure.
There are tons of strong back, good earning jobs. Build that bridge to nowhere in Alaska – Ketchikan needs it and we can employ the thousands of construction workers for years and the bridge will make double digit reurns for ever = or almost. Just show Alaskans the money. MMT could save our butts and get us out of this funk.
The usa has a lot going for it; it has ample resources, is technically advanced, innovative and progressive people, has freedom, good weather, and a beautiful land. All we need is someone at the helm that can pull it altogether. This is still the best country in the world to live.
It really is. It has the best geography. A lot going for it. I am optimistic long term once we get through these next six or seven years.
Great comment.
Can’t wait until we have a president with a 1,5,10 year vision of how we function domestically and as a good global leader/citizen. I do not care what party they are attached to.
Yes the US has a lot going for it – not to mention incredibly easy borders to defend – big oceans on either side of us.
On the downside, approximately 30% of the populace are religious fanatics. And, because of the failure of the founding fathers to envision two dozen virtually empty states, the least educated and scientific-minded among us end up controlling the government.
The US has never looked better to me and I even think darktstar’s negatives are pluses. Those guys want to work – it is not like Israel! Taking our infrastructure to the 22nd century will put TRUMP’S BASE to work – Louisiana and Arkansas built the pipeline in Alaska they can build thousands of wind generators – the ocountry has plenty of work to build careers on. We need Ike – remember I LIKE IKE. He kicked ass for Kansas – and others. We have dorked around with money for too long – demote the Fed promote dreams of the future with everyone wealthier. A Gini Index of 30 like Northern Europe is my goal – AN ALL AMURICAN GOAL..
Lol
I do take umbrage from time to time with the colourful language to describe Japan’s economic situation. Phrases like ‘deflationary abyss’ really don’t capture the everyday experience of living here.
There are good reasons Economics has been called the dismal science.
I don’t disagree with his point that current monetary action could be disinflationary. But how does increasing use of UBI, MMT (i.e. direct payment to citizens) change the dynamic? Seems to make inflation more probable than after previous crises.