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It’s best to remember that today’s wealth inequality is strongly skewed by the inflation of financial assets. So this ‘wealth’ deserves ironic quote marks. The inflation of financial assets has been the ever more explicit goal of the US government which is perfectly understandable as the dance between power and wealth plays out. It has played out to the point of an almost perfect virtuous circle. A self reinforcing dynamic where every increase in power and wealth begets another increase in gross financial assets and their prices.
Still it is best to remember much of the ‘wealth’ is illusory, a high abstraction.
It occurs to me sometimes that economics as the textbooks have it would work if only everyone was German. Post WWII Germans that is. Make great products, industrious and cooperative yadda yadda yadda, and not enamored with asset inflation or debt.
The perfect thing would be higher rates and QE.
I’m agnostic on anyone’s desire for higher rates. Sure IM could be right. I just think the banking giants and the worlds 1% want QE to help asset prices, to hell with bank profits. Who needs profits now-days anyway? Amazon doesn’t need them and they are the darling of a whole new generation of so called intellectuals who focus on economics.
And what about the near trillion US corporations are going to spend on their own stocks this year? What about Yellen’s remarks about poor people building assets?
https://www.federalreserve.gov/newsevents/speech/yellen20140918a.htm
The idea that asset inflation builds wealth is not just a fashion now it is doctrine. So I think more QE will come and everyone will know why, to boost asset prices and all the important people will cheer.The Feds tools are money and credit so they think they can solve all problems buy using those tools. It’s the old, well not so old, Law of Instrument. “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”
https://en.wikipedia.org/wiki/Law_of_the_instrument
It hardly needs saying but Fed Heads are economists and two generations of them have been taught that ‘monetary policy’ can fix most ills. Even if they didn’t quite believe it in 1978 the congress told them they could and ordered them make a perfect economy with the Humphrey Hawkins Full Employment Act.
https://en.wikipedia.org/wiki/Humphrey%E2%80%93Hawkins_Full_Employment_Act
The source of the so called dual mandate. Why everyone forgets a stable dollar and balanced trade and budgets escapes me. Well mandates, dual or quintuple, do not mean the results will be delivered for as we know monetary policy cannot deliver all that economic goodness. However economists when told they were gods of the economy soon grew to love the idea and why not. Greenspan and Bernake grabed the reins and became demigods. What’s not to like, if your an economist?
The Saudi king is all but dead and who is making the decisions is obscure. It’s hard to say if the rather tattered Saudi US partnership is all that strong in any case. Even if it is they don’t really know what they are doing. For every possible plus the oil price drop carries are an equal amount of negatives. As in plus for consumers vs disaster in the fracking and dilbit land. Then there is deflation of assets values which puts pressure on the vulnerable financial markets.
Not that our great strategic thinkers think in the very largest terms but burning as much oil as possible now only makes the future worse, and that worse future closer. That’s a pretty high price to pay for kicking Vlad the Impailer, as I think he is referred to now. It is hard to conceive that our great thinkers are on board with it all. Whatever any of them think they are doing you can figure it’s the wrong thing.
I keep coming back to the decrepit monarchy. Osama didn’t have the balls, the means, or his heart in bringing it down. The new generation does. At least the first two anyway.
One possible scenario is that ebola does not become epidemic or pandemic now but the potential persists. Persists enough that it becomes just another drag on commerce and ever elusive social mood. That ever elusive social mood, or zeitgeist, then reflected in the financial and all asset markets, in a down cycle. Just another deflationary force.
How about a two week quarantine for all air passengers? Impossible I know but we could be not so far away, 6 months, a year, from such things in the form of nobody wanting to get on a plane or nobody wanting one to land in their city.
I have no way of judging the probability of the bad to worst case scenarios for ebola except they are above zero. The possible impacts on commerce, or work places come to think of it, would be huge. Huge in ways never seen before in a modern economy. Combining commercial and financial dislocation.
Equity prices are one thing, there’s a sucker born every minute after all, but I am not sure how of if the public is participating in the credit side. I always figured bank lending was the font of most credit for the frackers and if they can’t do their own due diligence so be it. I suppose maybe there are some sorts of driller CDO’s the banks and investment banks have been peddling in which case the lack of due diligence could in theory come back to bite them. No likely of course.
This has all been thrust front and center with the oil price plunge. That is blamed on the Saudi’s and maybe that’s right since they have been stupid about over producing for 40.years, easily pumping out 100 years worth. For most of that time however that has been great for Americas myth of no limits. but now it’s a stab in the back. Or maybe both figured it would hurt Russia so along with our own feckless leaders forgot about boomtown on the high plains of North Dakota.
It’s easy to understand the dysfunction of a monarchy. It’s sad to see how advanced it has come to a democratic republic. Still no matter how evident the stupidity of our elites is nobody ever seems to notice except within the narrow confines of partisan politics.
Sure Pierce is confused but so is almost everyone. Thinking there has to be an escape hatch. Who like most does not appreciate what a dilemma really is. Thinking it’s a hard choice which if decided correctly will lead to all good things when in fact a dilemma is a choice with no good outcome. I think this is a singularly American thing and Pierce long ago caught the bug.
It might be more accurate to say that this American way of thought has been exported around the globe and Europe,or at least its leaders, have heavily bought in. If for no other reason is it usually pays well. See Tony Blair as example number 1.
In perusing the comments to articles in Salon and Slate tonight, which I feel is a pretty good proxy for non Tea Party literate Americans who have remained in the middle class, it is apparent that most all are neo liberals now. They firmly believe growth is simply a matter of choosing proper policies. They believe the EU is based upon and functions under democratic principals. They believe everything the NY Times and the administration say about Putin. Ooops, I mean Russia.
If most might be somewhat skeptical of these sorts of things viewed through a neo liberal lens in relation to how things function in the US on issues ranging from police power, voting rights, the banking giants or the environment, the moment they look offshore it’s all ‘America, we’re #1, We’re #1’!
The thing with Russia takes the cake however. The need to feel superior is as strong today as it was in 1957. In that regard the war there which we helped fomen and which none of them see as economic, is a move of pure genius to support the status quo.
The inflation of assets is the purpose of the economy. Janet Yellen said as much recently when she urged middle class and poor people to accumulate assets to gain wealth. (wink wink, nod nod, elbow to the gut. Damnit, the Fed has your back on this stuff)
https://www.federalreserve.gov/newsevents/speech/yellen20140918a.htm
No mention of work, income,wages, heaven forbid. That’s so 19th century,she could have said. Do I need mention the absurdity of people barely scraping by, or less, buying assets, presumeably finanicial? The assumption that inflating assets creates wealth is absolute. Well it would be if they thought that assets inflated but no, they only rise in value. A perfect storm of misconception.
Apparently it is time to abandon the portion of economics that deals with profit and loss. Cash flow profits don’t mean a thing anymore for select major corporations. Take Amazon, or ARAMCO. The latter a proxy for the slight discrepancy in the cost of Saudi production, $2 or $80 a bbl, who cares? The accounting such as it is, is make believe in any case, only a matter of interest to old fashioned students of corporate balance sheets, or skeptics of the status quo,meaning nobodies or in some cases nobody. Shale oil? Same thing.
Freed of simple balance sheet accounting, economics is free to do whatever its masters want it to do. Make 65% of Greeks poor? No sweat. Make Amazons market cap $150bn, fine. Set the return on sovereign bonds of bankrupt nations in negative return territory, great.
Point being maybe this fixation on the financial markets and thus economics is a mistake. It is certainly a mistake in most short terms. Long term is something else again.
Again and again I come back to the Karl Rove quote.
The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” … “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”
Sure, in some future the empires aristocrats may face the guillotine, but when? The official poverty rate in the US is around 15% and it had never been below 20% prior to 1960 so there is a long long way to go before the heavy blade or nooses come into play here.
The NY Fed and the banking giants are partners for one very good reason. To sell Treasury debt. Without the well oiled mechanisms for distributing what until recently and for 6 years was a minimum of $100 billion a month of Treasury paper it simply could not have been done in an orderly manner. The way to look at their non existent regulation is that in return for working hand in hand with the Treasury and the Fed the giants are allowed to do what they want.
Even with the episodes of QE, for which the banks are agents, Primary Dealers of the Fed., the Fed cannot buy the newly issued paper directly so it still needs be auctioned. Since only 7 of the Feds 20 or so Primary Dealers are US banks the global giants are the partner with every government that borrows, which is all of them.
I will repeat that what the giants are is part of a mechanism, a system, to market government debt. They are partners with governments. The nature of that partnership is based upon their freedom to do what they may or if caught to not suffer criminal liability as institutions nor the individuals involved.
Greece, Spain and Italy are essentially stable politically. There is no possible way to effect change within the system because nobody within the system has the slightest clue on what change is needed. Oddly they are right but for the wrong reasons. They see no alternative to economic orthodoxy but the alternatives to that amount to one thing, deflation on a massive scale. If we the deep critics of the system were given the reins of power we could not bring back growth. And the alternative to growth is deflation, writ large. Not just prices, incomes, asset values, tax receipts and government spending. All those yes, and then everything else for most everyone.
I try to have a bit of sympathy once and awhile for the Dragi’s and Obama’s of the world because the sit on the horns of an unsolvable dilemma.
I have to disagree about rising rates, for the benchmark Treasuries anyway. Except for the overnight bank lending rates, Fed Funds in the US, in the end all other bond rates are set at auction where direct action by central banks is not possible. Only indirect action is. That being things which heighten liquidity in the financial sphere. QE did that in spades, the BOJ is still on the case and the ECB is trying too.
With a lot of money surely flowing into the US, liquidity in the Treasury and bond markets will remain strong. The ROW not so much on a case by case basis.
‘The Fed Funds rate , the rate that they ‘set’ , can rise and fall and not effect overall liquidity. To wit from 2000 till now the rate rose sharply, plunged, rose sharply, plunged again, all the while liquidity was strong except for the crisis period say 8/08 to 3/09.
The amounts of money, liquidity, sloshing around the global financial system are stupendous and defy analysis. I don’t doubt for a moment interest rates are set to rise in various places and various sectors all over the globe. Nor do I doubt the Fed fully expects this and furthermore expects rates to rise most everywhere more than here.
However not just so the banks can make money. The Fed has another master and that is what is now popularly called the permanent government and others call the empire. For the empire the biggest weapon is currencies and we have now launched an economic war. Look no further than Russia. If the EU goes down, so be it. As Victoria Nuland famously said, “fuck the EU’.
Better than money is power. How much money is enough? I think they have enough. The power to keep it is more important and the best way to do that is to bring others down. If they would happen to lose 50% of marked to market value of their assets while others in other nations are losing 70% then you can guess who wins. The JPM’s and GS’s don’t need more money, they need the power to keep it.
Fisher “I think we could suddenly get a patch of high growth, see some wage-price inflation, and that is when you start to worry.”
Let’s set aside the ‘price’ part of wage-price inflation because the phrase is intentional disinformation.Greenspan used to go before congress and tell them if wages began to rise he would slam on the brakes. The peoples representatives kissed his ring. This is democracy in action?
It goes without saying asset price increases were not considered inflation.
Now after 5 years of QE when probably half the homeless know that it is inflating assets nobody at the Fed will admit it while continuing with this “wage price” crap, and nobody in the Beltway has a clue. Some of them do wring their hands about inequality. You can’t make this stuff up.
Well sure but is the NY Times supposed to be Pravda and Izvestia all rolled into one? That’s the point. Shouldn’t the West have a higher standard? Naive I suppose. When it comes to empire the US press has always been for the home team.
I had a chuckle yesterday when the NY Times did an expose of a Russian bank that was doing quite well since it is closely associated with Kremlin/Putin insiders. Thank God there is no similar situation here. (sarcasm alert) (The nominal difference is the Russian bank is new while ours have roots going way back since instead of setting up a quasi public bank as a central bank Russia was busy with a revolution)
Virtually every Putin/Russia Ukraine story in The Times could appear in the Russian press with American/European and Russian names switching places on who are the bad guys and they would be equally as factual, or less. The Times is all in on the war with Russia in other words and is virtually propaganda central to drum up support for it. Far more so than the Iraq thing, whatever you call it. Where Judith Miller was a direct pipeline to whatever was coming out of Cheney’s shop. (Later embedding and actually semi taking over the hunt for WMD’s which lead to her being named The Queen of all fucking Iraq by Duncan Black)
What the purpose of Iraq was I will never know but the war with Russia is a more difficult puzzle for me. I see the Russia stock market is at multi year lows. We’re winning!
Money creation is eminently simple. Bank loans create bank deposits and bank deposits are the repository of most of the worlds money.
Money of course can’t save the climate or the environment. More money may make inadequate rear guard actions to mitigate environmental damage more prevalent but the exploitation will only get worse at the front end. Without more money however the system cannot continue. Even the same amount means death of the system. Enough new money must be created every year, via the expansion of credit, so old debt can be paid.
Something has to give eventually. Plan A is let the environment deteriorate as the results will be evident over centuries. End the credit/money system however and the bad results would be immediate and far worse for far more right away.
US withholding tax receipts have been rising at about a 4%/yr rate for two years. Withholding’s overwhelmingly come out of payroll wages. Yes there are 1.4 million fewer full time jobs than in August 08 but weekly new UE claims are have been setting record lows for a year.
These facts mask the problem we are well aware of. That is fewer and fewer people and households are participating in the economy as the middle class shrinks and the underclass grows. Still the gross numbers are not in any way saying the economy is failing. It is just failing more and more people. People who don’t count. Which is exactly the way a conservative society is supposed to work.
Managing the markets and the economy works, until it doesn’t. We may not like it but that’s the way it is. I think IM makes an error touting the economy failing when if fact it is holding its own, in a truncated way. Serving fewer and fewer people but again, they don’t count.
IM’s enthusiasm for Yes which he explains well here was based upon tactical thinking. That being yes would launch a period of change. In the end change will come anyway. Would yes have brought a more coherent change? I have no clue. I suspect not. The complete lack of a plan for a currency is the tell. There is no possible way to run a modern nation unless it is part of the financial colossus. It’s borrow, inflate or nothing.
Investing too much energy in the political moment is probably a mistake. Well it is for someone like me in their 60’s. But AE knows the best and only way to expend political energy is locally. The big picture is just too big and resistant to change from below.
I had not mentioned here that a close vote was absolutely going to go the no way. It’s just too easy to fix these things. Surprisingly it seems some losers are looking there now but 10% is just too big. I believe a strong margin of yes votes, if not 10%, because the status quo is just the safest and best choice for most people.
Regret and recrimination if it persists will result in nearly as much change as a yes vote would have perhaps. It just won’t be as nice and neat but really, why should that be expected?
America’s centralizing agenda and model promised and produced extensive stability and ‘growth’ for its partners. However the agenda has become corrupt and the model dysfunctional, or is it the other way around? Never mind for now the growth dead end. Dead end as a concept, an organizing goal and principal and dead or near so functionally.
If America could have done much better, of course it could, it too is as subject to the flaws of humans as any other and so we find ourselves here.
RE Farage. I’ve remained agnostic on the Scottish question because I know nothing about it. I do know enough to know that how questions of the day are presented to us is always false or only offers a tiny fraction of the whole so as to be disinformation at best.
Near the end Farage says what I said here recently. There is no plan for a Scottish currency. Nobody who is within two degrees of power anywhere have a clue about how to create a sovereign currency or think such a thing is anything other than a nightmare. Nobody near power can imagine a world which is fundamentally separate from the growth/debt model, for want of a better shorthand description of Western Industrial/financial system. That said independence has to be a false word in the context of this vote.
I get that IM wants to kick the status quo in the nuts. That’s fine. However he and everyone who does and comes from the ‘collapse’ school should come forward and say what they want is to hasten the end, the collapse of the status quo. I don’t think this is a trick question.
PS
Then there is UKIP itself. Again I was clueless. WIKI will do for now. It is a party of the right.
https://en.wikipedia.org/wiki/UK_Independence_PartyAs a general rule separatist parties and movements in any country bring dysfunction on a national level which in turn makes separatism more attractive, in a vicious circle. For 30 years Quebec has been almost completely absent on the national level as separatist candidates win most elections and are then excluded from the government. Canada is adrift now with a coalition led by, you should probably have guessed it, an American style corporatist. I suppose a similar dynamic has been playing out in Spain.
Scotland doesn’t quite fit this mold as Britain, the empire, small ‘e’, never really offered much of any power to the periphery and after all it is it’s own country, sort of. It should be noted Canada has a very peculiar legal relationship to the empire an odd formality of having a queens representative certify elections, if that’s the right word.
Not that centralizing power has been a good thing on any national level. It’s just that separatism is not really going to solve the problems people want solved. Our problems transcend politics as every AE reader should understand. I get why IM is all for decentralization but is that really going to help?
As these things always go, the no’s will win. That’s what I would bet and what a wonderful excuse for a rally. Not that I know a single thing about Scottish politics in general much less this issue. The scare warnings will turn to threats and most people who just want to live their lives without drama and keep what they have will vote no as I see it.
Well there is one thing I think I know. The Scottish government is not prepared to issue a currency. Nobody is. Nobody even knows how anymore and anyway the financial system won’t accept it. That alone is enough to scare the pants off any ordinary Seumas or Sheena. It’s why every bailout passed everywhere even though voters thought they didn’t want them, but they didn’t vote on that. Easy enough to say no but faced with the end of life as one knows it no becomes very hard. Or yes in this case.
Still it does seem we have hit a point of stasis on the centralizers of power. What could be a better place for Yeats?
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.I was a run of the mill sort of liberal, now called progressive, and on the hot social/political matters of the day my sentiments tend to side that way. it has been on the economic side that I have had a hard time coming up with a very very broad definition or explanation for liberal failure. An explanation which compares liberalism to conservatism, as both are generally defined today.
Setting aside any policy you can think of, monetary, fiscal, whatever, the original sin of modern liberalism is growth. The growth IM always disparages. That ‘growth’, growth of the middle class, growth for all can be understood as a liberal project.
Most think everyone is for growth but in fact conservatives are not. Even if most don’t know it. Conservatism at root can be defined as the desire for a strictly hierarchical society with a small aristocracy who hold most power and wealth. Conservatives believe this is not only the proper order but a natural one. They expect a very large lower class. They want a very large lower class that knows it’s place. That does not strive to advance. Get uppity in American parlance. Give the lower class some money and they will no longer toe the line and defer so readily to their betters.
Look no further than the heart of American conservatism, the South. Slaves were the perfect underclass. After slavery blacks continued to be the lower class and don’t forget many whites were poor too. To this day the states of the old South are poorest and lowest in every possible measure of social well being. Education, health, family stability, all last.
It was the liberals who brought the idea of raising up everyone economically and every other way that conservatives decry to this day. If not in those terms directly since saying they want the low classes to stay low, and for there to be little social mobility would be death at the ballot box. They do however skate very close to outright saying they want people to suffer and live in fear, to have no security.
The thing is growth is over and so in an odd way conservatives are riding the path of history, but for the wrong reasons. In my eyes anyway. The proper political message should be forget growth let’s focus on using and distributing our gigantic wealth for the benefit of more people. Liberals can’t say that however so they have Krugman et al saying growth can come again, with the right policies.
I will stop rambling. I will link to an old great blog essay that touches on this, let’s call it conservative psychosis about prosperity. Thinking they want prosperity but really wanting a proper social order. Truth be told of course the end of growth will be the end of them too.
https://examinedlife.typepad.com/johnbelle/2003/11/dead_right.html
First on the jobs number. It’s the Seasonally Adjusted number. Fiction. Analyzing anything from this headline number is a fools errand.
Lee Adler
The actual, not seasonally adjusted data shows that the real conditions on the ground have not deviated one iota from the trend of the past 3 years. The actual year to year gain in nonfarm payrolls of 1.85% was within and still near the top of the growth rate range that has been fairly constant since December 2011.”
On Ukraine, without approving the analysis or sentiments but simply for a break from the official narrative. Along with properly modest statements about the unknowability of the future. I am with IM that ‘we’ cannot let this stand but on the other hand there is little that can be done.
https://vineyardsaker.blogspot.com.br/I will only say that it does take two to tango. Declaring independence under force of arms is what has brought the warfare. I have exactly zero clue how things would have preceded without military action but am certain that on any short or medium term basis it would have been better for a large majority. Then too a majority favoring independence and incorporation into the Russian Federation or just more autonomy doesn’t mean they are willing to sacrifice their homes and families to get it. There was no vote on that.
Are the two new rump republics if granted almost full autonomy viable? It seems doubtful. Maybe they would join and form one, but still as the excitement of nationalism subsides the dirty work of politics and economics would commence. I can only imagine how fraught that would be. Or would they be quasi military states as military men seem to be the leaders now.
Feel free to dump on all my notions here but in any case it’s all history and what ifs now. We will just have to wait and see how things proceed as winter descends. Especially in Kiev and if it’s so called government can survive the winter. Well the people too both east and west. It does occur to me that rumors of war or war itself would be a powerful force for centralizing ever more power with the EU and offer the ECB an excuse to work around its ban on buying sovereign debt directly. This may be an underlying reason why this all has come to pass. Creating a sideshow to facilitate further power grabs.
Setting aside the real motivation for raising rates the fact is that well advertised incremental short term interests rate increases have a nominal impact. The Fed Funds rate rose from 1% in mid 04 to 5+% by mid 06 and GDP continued to climb. It isn’t the rate which matters but the rate of increase in total debt which counts. The current conventional wisdom holds that credit is expanding slowly but this is false. It is above Doug Noland’s line in the sand number of $2tn/yr despite ever slowing Treasury borrowing.
For our situation what counts is QE and its almost end. It won’t really end totally by year end because the Fed will continue to buy MBS to replace retiring paper but that will be a far cry from the $100+bn/month when this round started and the current $40bn or so now.
Personally I think they are going to end, almost, QE because the stock, bond and asset bubbles are becoming a huge political risk, from below. They know the score, some of it anyway,that QE is just aiding the asset and income nualtes.d The elites would prefer QE forever.That and they have been saying they will for some time now and not doing so is a credibility issue. I could be wrong but finding true motive is usually impossible for any actor is liable to lie about their motivation.
It’s easy for me to say but making a bid for full independence by military means is a mistake, because it is doomed. Or so it seems to me. The end results will be far worse than they otherwise would have been. First from the destruction of the war itself and then the inevitable retribution. I have no clue how things would have proceeded without the bid for independence via war.
In regard to Yugoslavia which is a reference point to these people we were always told that that war was brought upon the Kosvars and Albanians by the Serbs but it seems it was the former under the KLA banner which started military attacks on the latter with attacks on police and latter military targets. Not to defend the Serb killing field or months long murder by sniper campaign against the their opponents. Point being once the killing started the side that the West supported was supplied with the endless amount of bombs necessary to prevail. The difference here is we were on the side of the independence seekers there. It is fully apparent that in this case the unlimited firepower and rhetorical support necessary to defeat our chosen bad guys will be used. Thus my conclusion that the independence movement is doomed. Then too while a majority of the people in the break away regions might support independence I seriously doubt they want war to achieve it.
Of course what the peanut gallery thinks is besides the point and the dogs of war loose. I am for neither side. Ukraine and the break away region could exist apart and the world would hardly notice. Both sides have chosen war and now only sorrow will follow.
I couldn’t bear to read the Foreign Affairs article or the ZH summary when it was posted, knowing it would be a logical train wreck. Obviously the Fed is not going to be passing out dollars to regular citizens or households because first there is no possible mechanism and second it would be politically impossible. Sure a majority of voters would agree but nobody who is anybody would and that’s who counts.
That’s all setting aside the fact that the idea there is a shortage of money is so profoundly stupid. To quote Gandhi somewhat inappropriately, “There is enough for everyone’s need but not everyone’s greed.” Or deeper into things that need to be set aside when discussing money printing and economics itself is the fact that neither can address the real situation which transcends money and that is earths capacity to supply the human population with food water and energy enough to stay alive.
Who knows, maybe Hussman’s deconstruction of the article might gain some traction but he isn’t about to admit that money or economics themselves cannot fix all things, the really big ones. In fact can only make them worse.
As Lee Adler says, austerity is not a option. Meaning that it is a certainty. Oh sure, for some time longer money can be lent and spent but in the end austerity will be imposed.
Zero Hedge has no editorial policy or if they do it could be described as, whatever it is I’m against it.
As long as it is against anyone with institutional power government, corporate, whatever. So AE certainly fits the bill.
I used to say if Osama had any balls he would attack the Saudi kingdom. Well there are means to be considered also but I think it’s fair to say no such attack on his home was on his radar. IS however is a different story.
Not that I can imagine how it would play out much less start except perhaps with some attacks on high people. I suppose attacks on the ports is possible, if they get planes and people to fly them which doesn’t seem likely. Much less going out into the vast desert with a lot of Shites in the region. Still the point is were the Kingdom to be attacked and its oil output impeded much less really hurt oil could go to the moon. Pick a year, any year, 15, 20, certainly by 25, what Nixon called the Big Enchalda is still that and the week its 40 years of pumping almost every possible barrel ends so will life as we know it.
I agree in theory Obama should have gone to Ferguson but in practice even if his motives and words would be pure the result would do more harm than good. It has to be understood the degree of pure rage he inspires on the right and inserting himself into the situation directly would only stoke the hatred, to perhaps dangerous levels.
We dislike him, or worse, because of bubbles, wars, etc. They hate him because, just because. For reasons beyond reason.
Even if his overall motives are good,by our standards and that’s highly doubtful, it is beyond his capacity to even begin to deliver on them. To lead in another direction from the Beltway is impossible because there is nobody there within two degrees of separation from policy power to follow much less advise.
The big dog central banks will never raise their official target rates except perhaps in a few baby steps. Those rates are ultra short term rates, overnight rates, aka Fed Funds Rate in the US. Those are the only rates they can control directly. They and everyone talks about how the Fed controls interest rates but besides the inter-bank overnight rate all they can do is influence.
Someday that influence will wane. Slowly at first then ever faster. In 1 year or 10 or 20 I can’t say. Nothing will change until rates rise. Nothing fundamental anyway. Then when Treasury rates rise, and/or rates in the EU,or Japan,or the EU or China, against influence and design, everything will haved changed.
(I hold to a bizarre theory that top quality and size corporate bonds and liabilities may for some time be lower than Treasury or other sovereign rates. This is really a goal in the corporate world. However they believe they can just sail along with the devolution of government. Good luck with that. Then too maybe it won’t come to pass. The breakdown in governance because of governments inability to borrow for nothing may be too fast to allow corporations their moment of triumph.)
Right, Naftogaz is, soon to be was, a state owned monopoly. So any proceeds from the sale go to the state. Well the state such as it is. Beside, one can only imagine how much of it will end up in the other hands.
Are the gas pipelines privately held? If so there are going to be some very very rich people. If not Kiev’s coffers are going to swell.
The militarized Russian separatists having declared ‘independence’ are equal actors in the tragedy. Inviting a war to their region, which they cannot win. So the boys will be boys, Russian speakers killing Ukrainians and vice versa, except in the latter case its mostly civilians who are being shelled and bombed. To what purpose?
To bring the death and suffering to such a level that Russia looses the will to stand aside? That’s what it looks like to me and it’s sick.
Keeping in mind that the US/NATO seem to relish all this and have never once as far as I know attempted negotiation and de escalation I say pox on both their houses. I can find no good guys in the situation and with each passing day the longer term prospects for the residents get more grim.
I initially subscribed to the separatists shoot down, by stupid accident, theory. With each passing day of no evidence that possibility wanes. The alternative brings stupid to a whole other level. No matter how compliant Western media is an absolute absence of facts has to eventually be noted. Which brings us to stupid. It was only one thing to count on the kneenerk response see we got lead by governments and their lapdog but the obviously required massive operations needed to destroy the evidence on the ground and a relentless coordinated program of manufacturing evidence was obviously lacking.
If nobody who is anybody ever says ‘our’ side did the shooting I still think that on some fundamental level another level of faith, belief in our elites will have been lost. Maybe if only half conscious or until but the system is suffering a blow.
