Monday, April 18, 2016

Deflation’s Chinese Water Torture
Rick Ackerman thinks ultimately that deflationary forces will overpower the economy & the financial markets .. "Monetary stimulus the central banks have applied to jump-start the economies of the world is not working, not even a little. And yet, the charlatans who run the banking system, unwilling to acknowledge the devastation they have wreaked on savers, apparently still believe that pushing interest rates even deeper into negative territory will eventually float everyone’s boat. This epic delusion flouts not just common sense, but reality. For any fool can see that the radical policies pursued by the central banks have created a magnet for malinvestment on an epic scale, feeding a speculative mania that can only end in disaster. The pension problem, which my colleague Mish Shedlock has written about at length, perfectly reflects the lose/lose outcome of a deflationary bust. For in the end, every penny of every debt must be paid — if not by the borrower, then by the lender. This elemental idea was most forcefully stated by C.V. Myers in his prescient 1976 book, The Coming Deflation. Where pensions are concerned, liabilities have piled up so high that no one, least of all the twenty- and thirty-somethings now paying into the Social Security system, expects retirement promises to be kept. It is quite clear even now that would-be beneficiaries under the age of 55 are all going to get stiffed." .. will it all evolve in very slow water torture style - "Whatever happens, we should have no illusions about escaping the quadrillion-dollar black hole of deflation that the banksters and ‘Government’ have colluded to create in the name of ‘stimulus’."
LINK HERE to the commentary

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