This is supposed to be some kind of surprise? A revelation? The central banks exist and have always existed FOR Wall Street and London.
Abenomics is failing. The world’s third largest economy is now in recession, yet again. The massive “printing” of yen has not helped as we (and many others) predicted it wouldn’t. The Japanese threw all in and now the country is staring at a stark winter.
Not the kind of economic boom the Keynesians were hoping for.
Look at it this way. If you are part of the vast, generally assetless or nearly assetless middle class you won’t have to watch the value of what you have decline. I guess that’s a good thing, sort of.
The world is slowing. China is in serious trouble and the ripples emanating from Beijing are becoming waves. The Keynesian experiment post-Crash is failing. (As the Austrian economists said it would.)
World markets are built right now on cotton candy and the rainbow dreams of central bankers.
The Fed will always be able to stop a crash. Just like how the prices of houses always go up?
I remember sitting in my car in college listening to Howard Stern on the radio before class sometime in 2000. Howard and his crew were talking about the stock market which was roaring. The Tech Bubble was in full effect. The sky was the limit. If you weren’t in the market you were losing out. It was a similar vibe to the Housing Bubble which would emerge only a few years later.
Stern took a call from a listener.
Mashing the buttons and pulling the levers.
Has anyone else noticed that the world has been in a depression since 2008? And NOW they’ve lost “control”?
I think that it’s funny that David Stockman, Ronald Reagan’s former budget chief, starts his column with this sentence:
“This morning’s market is more erratic than Claire Danes off her lithium.”
Seems a little gratuitously mean. Accurate (?) perhaps but mean. But that is one of the things we like about the guy. His acid.
The yen debasement bus rolls on. Has a new tank of gas too.
Oil sends a shudder through the world economy. Japan goes for broke (probably literally) with the Japanese citizenry on board. China fears being sucked into a debasement black hole. Europe clings. We watch.
Japan, you gave us karate, Godzilla, walkmans (remember those?), sushi, Hello Kitty, and cars which didn’t fall apart. Though we fought you bitterly in World War II America came to love you more than any other country in the world with the exception of the United Kingdom (and maybe Australia, Canada doesn’t count). We hate to see you in your current straits. One, because we have a general affinity for the Land of the Rising Sun. But two, because we are riding the same bullet train here in the States,
See, everything’s cool.
It has failed. It has failed for over 2 decades now.
But I attach an interesting debate featuring Peter Boockvar (in the Abenomics is a disaster camp) and David Zervos (in the Abenomics is proof that Keynesian huja buja works camp). They are diametrically opposed and it is fun to watch.
Indeed. Europe is pretty much in depression. So is Japan. (But so what’s new?) And by the way deflation is not necessarily a bad thing. We had mild price deflation through the most prosperous part of American history between the Civil War and the Fist World War. Things should naturally trend toward being less expensive as innovation increases, delivery streamlined, and competition increases.- Just had to get that in.
Markets can’t levitate forever.
Ah yes, all the hokus pokus is less magic and more smoke and mirrors. Some of us have said this for a long time. But in the wake of Japan falling back into recession, Europe’s continued depression, China’s slowing, and the ongoing troubles in the United States one gets the sense that on some level the grand poobahs of central banking are just tired. The act can only go on for so long. Sooner or later it has to end.
If you want to see what happens when the Keynesian virus truly takes hold of an economy and a society check out Japan. The once juggernaut of economic power, The Land of the Rising Sun, is now a great example of economic and social zombification as Charles Hugh Smith illustrates below.
It took 1 generation.
Money isn’t wealth. It measures wealth the way a ruler measures length, a clock measures time and a scale measures weight.
Boy is this true, but so many people, including the supposed shamans at the Fed fail to grasp (or choose oddly to ignore) this basic concept. Dumping “money” into the economic system isn’t going to make the economy grow, it will only make the money currently in the system worth less.
It’s not quite that simple.