Indeed he must. As Hunter Lewis the co-founder of Against Crony Capitalism has said, Keynesianism is the mother of crony capitalism as we know it. Keynesian economic theory gives intellectual cover to politicians and social theoreticians who want to spend the money of a society anyway. It is an excuse. It is a cult. It is destructive and it is obviously, especially as we see at this late date, as the world slowly succumbs to its ever growing debt burden,
Remember when Japan was going to rule the world? And no I’m not talking about WWII, I’m talking about the late 80s. The Japanese were buying up everything. The world was turning Japanese. Ahem.
That was a long time ago now. Indeed many of our readers don’t remember the 80s Japanese surge because they weren’t even born. Since those heady days Japan has stagnated. It may be looking at significantly worse than stagnation soon. The Land of the Rising Sun,
This is the slow but steady decline of Europe over the last decade. Spain has felt much of the brunt. Not long ago the country was knocking on first tier European status. No longer. But at least Spaniards can find some (cold) comfort in the fact that “Europe” doesn’t end at the Pyrenees as the French used to say anymore. Now it ends, it seems, at the Belgian border.
As I look out the window and see a half completed house across the street that the neighborhood didn’t want I am reminded that real estate guys are debt fiends by nature. (At least that has been my experience.)
During the Crash the Fed should have let things fall. It would have been painful. Very painful for some. But the market would have cleared. Some people would have picked up deals and many people would be in houses now, even many who would have hurt in 2008/2009, with positive equity.
Instead the Fed intervened and tried to put a bottom under house prices. As such we have the situation we have now. Millions of homeowners still underwater and a much less mobile workforce.
That is a pretty significant stat. It certainly does not indicate upward mobility for today’s youth.
It also indicates how completely out of whack our crony system of student debt is. The colleges love it. The students well, they aren’t able to pay the money they were loaned back. So they don’t love it so much.
Now, these statistics do not mean that taxpayers will need to pick up the tab for 46 percent of the outstanding student loan balance,
It’s certainly not the only thing keeping the Bank of China chief awake at night. There are many challenges staring the Chinese economy square in the face right now.
The debt monster hasn’t gone away. It hasn’t been tamed. It is growing, lurking, just waiting for interest rates to rise. But right now, few are concerned.
In the words of Yoda, “You will be.”
“We may not be seeing isolated bolts from the blue, but the signs of a gathering storm that has been building for a long time,” Borio said.
The above comes from the Bank of International Settlements in Switzerland.
In mid December we asked;
The winds sure did start to whip at the beginning of this year.
Recently Penguin Publishing did the same thing and the “no college required” trend is a trend which is picking up steam in the working world. It’s about time. There are many qualified candidates out there who are marginalized simply because they lack a college degree.
As we’ve said before, college can hold much value. It was valuable for me that is for sure. However, the cult of college has long been out of control. Many many people who go to college these days shouldn’t really be there.
The USA IS an exceptional country. We are SUPPOSED to be different from the rest of the world. This is SUPPOSED to be a place where the citizenry is respected. Some people, powerful people, have forgotten this. They should be reminded.
One of the reasons there is so much unease in the country (and in the world) is because everyday people feel completely marginalized by the powers that be. There is a sense that everyday people are now just observers,
7 US Marshals came to the guy’s house, with automatic weapons, and hauled him away over a $1500 loan from 1987. Then he had to sign a repayment plan at the courthouse.
He owed the government a relative pittance and yet the full resources of the US Marshal service were employed to bring this guy in. What do you think the cost of 7 marshals, the cars, the judge’s time, the legal processing, etc. cost the US taxpayer?
I certainly see it where I live. Across the street from me are homes which are in the $500k-$1 million range (my neighborhood is nice but more modest) and it is filled with retirees, most of whom built their homes in the period after the 2008 Crash. These were the folks who had money during those particularly lean times. The only people who could get a mortgage. Indeed at least some of these people probably paid cash for their homes.