Central Banks Are Crack Dealers and Faith Healers
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William Henry Jackson Tunnel 3, Tamasopo Canyon, San Luis Potosi, Mexico 1890 The entire formerly rich world is addicted to debt, and it is not capabl
[See the full post at: Central Banks Are Crack Dealers and Faith Healers]Read those 2 Tyler pieces last night. At least I tried. At my level the only take-away is ‘keep an eye on emerging markets to see if one blows up’. What does “blow up” look like one wonders? You had me convinced that deflation would come to all of us (I thought the EU was just “first”) but now I’m thinking the US might get inflation? Well we already have it just not where they count. But I’m still not sure, both arguments seem good. I can’t see the inflation with zero velocity, as you explained. But a book I just read said we have been “exporting our inflation”. Could it come back home? Will China start charging us more?
BTW, I really liked the Morally Bankrupt EU piece. Where’d you get the 2 cute little NSA bots? Are they permanent (like “Keepers” in Babylon 5)? Or do random ones simply appear every time you type P U T I N?
Crackonomics seems to be the new paradigm; another story on Zerohedge a couple of weeks back was about Douglas McWilliams, the British ‘world leading economist’ who was allegedly filmed puffing on a crackpipe recently, after having been cautioned for assaulting a prostitute.
Since the UK recently improved its GDP by factoring in drugs and prostitution, maybe McWilliams was just doing his bit to improve the economy. If QE is monetary crack, then the addicted economies’ teeth have already fallen out, and they’re doing the shmoney dance as they light the next rock, oblivious to the damage being caused. They are having to hit the pipe at ever more frequent intervals, as the effects wear off quicker the more they QEase down at the central bank drug den.
OD can only be a matter of time, as the vital organs start to deteriorate and the user becomes more aggressive and paranoid.
the central banks have become one trick ponies for every problem, more credit…and keeping with the addiction meme, more credit is like more drugs, just going further into the problem…less productive economy….more casinos and less infrastructure
when every leg down means cranking up the money machine, everything that responds is credit centric, forget the long lead time, market driven, socially centered enterprise, that crap can pound sand, we get quick turnaround, high margin stuff….loans to suckers that can be securitized, new insurance programs for fast cash flow, no real estate this time, that’s still a smoking heap from the last crash
finance wants more finance, the oligarchs can’t imagine a world without full scale manpulation of everything, top down control…… but the world was built from the bottom up, productive meeting of needs, trade, manufacturing, old school economics
This is clearly prime time to be getting one’s own affairs, financial and support-system, in good order for a long bad patch.
Get a good food garden going, and figure out how to be comfortable with way less, especially if you can’t control the timing of the way less…@ John Day
Good points.
Last night my wife asked me if we’d be okay if Thailand’s economy crashes. We’re debt free. I told her we’re probably okay, but that not being an economist I’m uncertain of the effects for us. My wife’s job is secure (she’s a government teacher) and my retirement is as secure as the U.S. government. So, if our incomes aren’t affected, I’m thinking we’ll be okay, but, I can’t be sure. There always seems to be a Black Swan about…Crack dealers and faith healers? Better make that OMNIPOTENT crack dealers and faith healers. At least for now.
Before the era of omnipotent central banks, we had a series of economic potholes spread a few years apart: 1987 crash (1987), S&L crisis (1989), Asian Flu (1996), LTCM (1998), dotcompop (2000), subprime (2007) leading to the Bear/Lehman meltdown an Paulson’s abyss (2008) and and S&P500 low of 666 (2009). All of these events had the potential to bring down the system, or so it was thought. Then the central banks revealed themselves to be omnipotent, and see what has happened? Peace and stability in the financial markets. Poverty in the streets, for sure, but peace and stability and prosperity in the financial markets.
Look at what happened in the wake of 2008. Peter Schiff and his ilk promised imminent hyperinflation and chaos, but there was no sudden loss of confidence, at least not among the people whose opinions matter. Hard landing in China (2008-2015)? Commodities have crashed, but China keeps plugging along. PIGS debt crisis (2010)? Just breathe the words “anything it takes” and the crisis just melts away like an ice cube in the Santorini sun. Abenomics and the expected implosion of the Yen (2012)? The Yen is doing just fine, thank you. Student loan bubble (2013)? Just keeps going higher. Negative interest rates in Switzerland (2014)? The market shrugs it off, even as NIRP spreads like a virus. Busted SNB Euro peg (2015)? Got people excited for a couple days, but is now long forgotten. Oil price implosion (2015)? Yawn. The theme behind all of these recent crises is that they get everyone upset and worried, for a few weeks, and then … nothing happens.
The take home lesson for me is this: Throw out all of your preconceived ideas about how long this stability can (or cannot) last, and if you can, enjoy the moment. Sure we can all plan ahead with the expectation that this will not last forever, but let’s plan without all of the anxious hand-wringing.
Only a very minor point … leeches are used in contemporary medicine 🙂
“Australia’s leech industry, in comparison, is a backyard business. Brian and Carol Woodbridge began farming R. australis in Echuca, Victoria, 15 years ago, and now supply up to 5000 leeches a year to hospitals in WA, SA, Victoria and NSW – including Katie Laing’s stash in Liverpool Hospital. Brian says the demand is growing as word spreads. “If a doctor or a hospital doesn’t use leeches, it’s generally ignorance rather than dislike,” he says. “As doctors rotate around hospitals, they introduce others to leech therapy. I find if I make one sale to a new hospital I’ll generally make more.””
I know, sinny, but the example sort of works if you just stick to the idea that leeches were once considered a cure all.
@V.Arnold
I think Thailand will do relatively well, since it is so diverse, the Thai’s work well together, solve problems, and keep having problems to solve. Agriculture and weather are good, except for flooding, but flooding keeps people problem-solving. Government/military/business corruption is the ongoing big problem, huh?
Chiang Mai would be my choice, but then, I wouldn’t choose to be where I’d be an outsider, either. We left my older son’s appendix in Bangkok. He got very good care.
https://www.google.com/search?q=chiang+mai,+thailand&client=gmail&rls=aso&tbm=isch&tbo=u&source=univ&sa=X&ei=jT8AVer9I4e1ggSGlIGIDQ&ved=0CB4QsAQ&biw=842&bih=351&dpr=1.62
@Boogaloo,
It’s all controlled by the system until the system breaks. Then nothing is controlled, and there is financial regime change. This happens periodically in history.
Can you time the market peaks and get in and out just in time?
There is no use in hand wringing, and no use in taking Xanax (or self-delusion) for your worries, either.
What’s useful is preparation and diversification through lifestyle modification.
Downsize, grow food, ride a bike, live with less of energy and stuff, well within one’s means.@ John Day
“Chiang Mai would be my choice, but then, I wouldn’t choose to be where I’d be an outsider, either.”Well, Chiang Mai has a huge expat community; but I choose to steer well clear of that trap.
Even in America I am an outsider: Much better to be an outsider here.
Chiang Mai is troubled by an annual pollution problem and is also horribly expensive when compared to many other areas.
Thailand still produces most (if not all) of its food. Very important given the f**ked up trade agreements being foisted upon it. Fortunately Thais have resisted signing on to such thievery.
And yes, the corruption here is broad in its scope, yet it doesn’t compare to the corruption of the now faux democracy named the United States; the body count being far lower, vastly lower here.
So yes, I’m fairly confident this is a good choice, given my 12 years living here. I even speak the language reasonably well; that goes a long way with the people here.
Cheers
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