Wednesday, October 05, 2016

We Are At The End Of Monetary Illusion
"That is likely the huge significance of last summer – the end of the monetary illusion as at least 'money printing' .. Even in Japan where monetary 'stimulus' has been at its most intrusive there is very good evidence that 'something' changed in the middle of last year, and that there is nothing central banks or their policies can do to arrest the reversal. The Bank of Japan first tried more Qualitative & Quantitative Easing toward the end of 2014, but that only made it worse heading into the events of last summer. Adding NIRP early this year was really Strike 3. There is no money in orthodox monetary policy and there never really was. The only 'benefit' (that some central bankers might claim) was in how some markets believed in the myth instead of realizing (quite readily) how '…asset prices soar while basic economic needs like jobs and incomes are left far behind; looking more like depression than a historic boom period.' .. Japan’s economy continues to be the most obvious and clear evidence of the truth in that statement, but it no less applies everywhere the monetary illusion was once accepted without question. They really don’t know what they are doing."
- Jeffrey Snider
LINK HERE to the analysis

1 comment:

Anonymous said...

When Did Our Elites Become Self-Serving Parasites?

October 4, 2016

Jim B. summarized historian Arnold Toynbee's study of the rise and fall of civilizations: "Civilizations fail when their elites change from an admired dynamic creative class to a despised Establishment of corrupt rentiers, an entrenched governing class unfit to govern."

I would trace the slide into self-serving parasites to three dynamics: financialization, neoliberalism and moral bankruptcy. While definitions of financialization vary, mine is:

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

Another way to describe the same dynamics is: financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation.

The moral bankruptcy of our financial and political elites is self-evident. Combine financialization, neoliberalism and moral bankruptcy, and you end up with self-serving parasitic elites.