Draghi introduced additional ease into Europe this morning
By Monty Pelerin
A surprise rate cut (67 of 70 economists did not see
it coming, which provides a proxy IQ test for these geniuses) created turmoil
in markets.
What this means by
noon today is unknowable. What it means in a larger context is not:
- Europe is not in good
shape. Anyone who believed they were, should be disabused of such notions.
- The forcing down of
interest rates once again further exacerbates the longer-term
mis-allocation of resources. Such actions may buy time, but only at the
cost of greater problems down the road.
- Maco-economics is failed
witchcraft which should be apparent to anyone paying attention. Yet it
will continue to be used to justify “remedial” actions out of desperation.
- Governments around the
world have only this hammer (liquidity/stimulus). They will hammer away
even though that cannot solve the problem(s).
- Liquidity and stimulus
will not end in the US or Europe until markets end it. The market ending
will be either an implosion or a crack-up boom. Either is possible at this stage.
- Governments are in full
pretend mode. They have no control over the situation other than to fool
people into believing that things are getting better.
- The policies employed by
governments ensure the destruction of economies and themselves. Governments
spiral downward toward defaults and bankruptcy that will take economies
with them.
- Currencies are being
destroyed in terms of purchasing power.
- Nothing is being done to
correct economic problems. Politics
has deemed true remedies too severe. They are off the table, replaced by
extend and pretend actions.
- The shelf-life of this
government fraud is limited. Economic Armageddon is coming.
The frustrations
of watching this play out are huge. So too is the knowledge that this entire
scheme jeopardizes more than living standards and economies. It threatens the
very future and quality of civilizations themselves.
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