Jun 192019
 
 June 19, 2019  Posted by at 7:38 pm Primers Tagged with: , , , , , , , , , , , ,


Gustave Courbet The village maidens 1852

 

I intentionally start writing this mere minutes away from Fed chair Jay Powell’s latest comments. Intentionally, because the importance ascribed to those comments only means we have gotten so far removed from what capitalism and free markets are supposed to be about, that it’s pathetic. The comments mean something for rich socialists, but nothing for the man in the street. Or, rather, they mean that the man in the street will get screwed worse for longer.

And it’s not just the Fed, all central banks have it and do it. They play around with rates and definitions and semantics until the cows can never come home again. And they have such levels of control over their respective societies and economies that the mere use of the word “markets” should result in loud and unending ridicule. There are no markets, because there is no price discovery, the Fed and ECB and BOJ got it all covered. Any downside risks, that is.

But it doesn’t, because the people who pretend they’re in those markets hang on central banks’ every word for their meal tickets. These are the same people we once knew as traders and investors, but who today function only as rich socialists sucking the Fed’s teats for ever more mother’s milk.

Our economic systems have been destroyed by our central bankers. Who pretend they’re saving them. And we all eat it up hook line and sinker. Because the rich bankers and their media have no reasons to counter Fed or ECB actions and word plays, and because anyone who’s not a rich banker or investor is kept by the media from understanding those reasons.

 

What the Fed and ECB have done, and the BOJ, between Greenspan and Bernanke and Yellen and Powell and Draghi and Kuroda, is they have made it impossible for economies to let zombies go to die as they should. They have instead kept those zombies, banks, corporations, alive to the point where they are today a very big live threat to those economies, and growing. Look at Deutsche Bank.

How healthy do you think your economy can be if all the wealthy people are focused on whether Powell uses the word “patient” or not in his notes? Why would a vibrant company or entrepreneur give a flying damn about whether he does or not use a certain word? There is no reason.

But we have let our central banks take over, and that’s what they did. And it will be very hard to take back that power, but we will have to. Because central banks, while pretending to guard over the entire economy, in fact only protect the interests of commercial banks, and rich “investors”. And then tell you it’s the same difference.

There’s a case to be made that Paul Volcker was right when he raised US interest rate in the 1980s, but after Volcker it’s only been one big power and money grab for Wall Street, starting with Alan Greenspan and the housing bubble he blew. The Oracle my behind.

 

Japan is only just beginning to assess the damage Kuroda and Abenomics have done, and that’s at a point where both these men are still in power, and hell bent on doing more of the same. Something all central banks have in common; there are very few tools in their boxes, so they just repeat and repeat even as they fail. And that failure, by the way, is inevitable.

The Bank of Japan by now owns half the country, and they just want to do more. Kuroda’s plan to get rid of deflation was to force the Japanese to spend their money/savings. But the fully predictable result was that the grandmas did the exact opposite: they clued into the fact that if he wanted that, they had reason to be afraid, and so they sat on their money. And now it’s ten years later.

 

Draghi is going to leave in a few months’ time, and he’ll lower rates even more (towards 0º Kelvin), even if he knows that’s a really bad idea (it is), because at this point it’s about his legacy (after me, the flood). Same thing that Bernanke, Yellen did, clueless intellectuals who told themselves they had a grip on this. They never came near. That’s why they were elected, for being clueless. Wall Street doesn’t want Fed heads who know.

The pivotal moment was when Bernanke said they were running into “uncharted territory”, and then never looked back and started pretending he knew where he was. He didn’t and none of them ever did since. But they have academic degrees, and they’re willing to sell their souls for money, so there you are.

 

Central banks, or let’s say handing them the powers that we have, are the worst thing we have ever invented, and that’s saying something in the age of Pompeo and Bolton and Trump and the Clintons. The latter may take us into war with Iran, or any other country from a long list, but central banks are set to destroy our societies and economies from within.

It’s real simple: your central bank does NOT serve your interests. So get rid of it. Don’t wonder whether it’ll use the word “patient” or raise or lower rates by 25 or 50 points, get rid of the entire thing. There’s nothing there that benefits you, it only ever benefits bankers.

Now, of course, if you’re a banker…..

 

Note: I knicked the headline from something Tyler Durden said yesterday, that central banks are back to square minus zero. Too good to let go. Draghi back to square one, but then again not. Central banks should be abolished.

 

 

 

 

 

Home Forums Square Minus Zero

This topic contains 9 replies, has 6 voices, and was last updated by  Raúl Ilargi Meijer 4 months, 3 weeks ago.

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  • #48050

    Gustave Courbet The village maidens 1852   I intentionally start writing this mere minutes away from Fed chair Jay Powell’s latest comments. Inte
    [See the full post at: Square Minus Zero]

    #48051

    Oh man, I love that Courbet painting. the colors, the lines, the love of the subject. Makes me wish I were alive in 1852.

    #48053

    Ken Barrows
    Participant

    The problem is that no mainstream pundit has offered a way to prosper with debt growing more slowly (much less not at all) than income. Thus, there is no alternative to this nonsense because debt is a sine qua non of the system.

    IMO, there are alternatives, left and right versions, but they all would involve fewer cars, fewer plane trips, etc. When everyone believes in infinite growth on a finite planet, being where we are is no surprise.

    #48055

    zerosum
    Participant

    Why would a bank do something that would not be to their benefits
    A new system is being forged ….
    The Bank of Japan by now owns half the country

    All the bankers are following the same path
    “uncharted territory”,

    There’s nothing there that benefits you, it only ever benefits bankers.

    Now, of course, if you’re a banker…..

    The bankers have got to catch up to Japan.

    What name would be given to a social/economic system owned and controlled by the banks?
    Iron chains

    #48056

    V. Arnold
    Participant

    Oh man, I love that Courbet painting. the colors, the lines, the love of the subject. Makes me wish I were alive in 1852.

    Yes! That painting is a genuine stunner…

    #48057

    V. Arnold
    Participant

    What name would be given to a social/economic system owned and controlled by the banks?
    Iron chains

    Good one zerosum, good one…

    #48058

    toktomi
    Participant

    If there was a 5-kilometer diameter meteor on a collision course with Earth, I cannot imagine that it would make any sense at all to say something like, “get rid of it”.

    The amount of energy controlled by a relatively few individuals is beyond the imagination.

    The only remotely possible solutions for anyone are personal solutions. Industrial human society is toast, and we can only hope, for what reason I cannot offer, that collapse does not include extinction.

    …but I could be wrong

    #48068

    Dr. D
    Participant

    Katniss
    –The Hunger Games, where everyone outside of Capitol lives.

    #48070

    Dr. D
    Participant

    Since it won’t load images anymore:

    “Whatever problems anyone may have with the Capitol, believe me when I say that if it released its grip on the districts for even a short time, the entire system would collapse.” — President Snow

    “It must be very fragile system, if a handful of berries can bring it down.” — –The Hunger Games, where everyone outside of Capitol lives.

    Don’t tell me, when 60,000 Americans a year are tribute to their system, while live on TV, the Caesar Flickermans jeer.

    http://literaryviews5.blogspot.com/

    #48073

    Since it won’t load images anymore:

    It’s not that. For the Detenethor (?!) the other day, you used a URL with a special character in it (#). That will never work. This time, there simply is no picture, only a website: http://literaryviews5.blogspot.com/. Give the webs a chance!

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