The US Federal Reserve has been universally lauded for the apparent success of its extreme monetary policy of recent years. With key world stock markets near record highs, traders universally love the Fed’s zero-interest-rate and quantitative-easing campaigns. But this celebration is terribly premature. The full impact of these wildly-unprecedented policies won’t become apparent until they are fully normalized. The most-extreme monetary experiment by far in US history is just at half-time now, the fat lady hasn’t even taken the stage. The full normalization of ZIRP and QE is likely to be as negative for stock and bond prices as its ramping up proved positive for them.
... Greeks should be united in their fight for the rule of law and against the cleptocracy, and not divided over a referendum on an absurd question. That division, however, serves the cleptocrats well—they can go about their usual ways unnoticed. Whoever said “divide and rule” knew what they were talking about.
Referendum is a CYA by Tsipras & Syriza, but a deal is by no means the end of anything...
One of America's most notorious bank robbers, Willie Sutton (1901-80), is said to have remarked that he robbed banks "because that's where the money is." In a strange twist, the banks themselves are now beginning literally to rob their own customers.
As so often, Mr. Tsipras makes a number of fair points. However, it seems to us that everybody is skirting the main issues. Greece cannot become a “socialist Utopia”, unless its citizens are happy with being condemned to a hand-to-mouth existence for a long, long time indeed. Whether or not Greece defaults, the one thing the government will be unable to fund is the very socialism that is its basic ideology.
It is hard to believe that in these allegedly enlightened times this question even needs to be asked. Are there really educated adults who believe that by dropping helicopter money conjured from thin air, the central bank can actually make society wealthier? Well, yes there are. They spread this lunacy from the most respectable MSM platforms.
What do we really know?
“Things always become obvious after the fact” – Nassim Nicholas Taleb
“Facts do not cease to exist because they are ignored.” – Aldous Huxley
Some say that eliminating the welfare-warfare state and the fiat currency system that props it up will cause the people pain. The truth is the only people who will feel any long-term pain from returning to limited, constitutional government are the special interests that profit from the current system. A return to a true free-market economy will greatly improve the lives of the vast majority of Americans.
Matching the hindrances of the interventionist state is the manipulations of money and interest rates by central banks everywhere, which distorts markets, misdirects capital and labor use resulting in unsustainable booms and inescapable downturns that bring about wrongly invested capital and misallocated labor. This “wrong twists” to the market takes time to overcome and correct. It is government impediments to open, competitive markets – whether in America or in other parts of the world – that are the causes to behind slow growth and sluggish job creation, not “the rich” and their savings.
Threatened with deflation, the authorities will want to turn the tide in the worst possible way. What’s the worst way to stop deflation? With hyperinflation. Yes, we may suffer a year or two more of sluggish growth... or even deflation. Stocks will crash and people will be desperate for paper dollars. But sooner or later, the feds will find their feet and lose their heads. Most likely, the credit-drenched world of 2015 will end... not in a whimper of deflation, but in a bang. Hyperinflation will bring the long depression to a dramatic close long before a quarter of a century has passed.
The results of the latest FOMC meeting confirm that most of the media and investor communities don't get the joke on Fed policy since the crisis. No change in '15
In spite of the landmark decision 80 years ago against the imposition of economic fascism in America, the U.S. government has continued to grow in power over the American people. But it should be remembered that men of courage, integrity, and principle can stand up to Big Brother and resist the headlong march into economic tyranny. That unanimous Supreme Court decision in 1935 was one bright example of it.
In his recidivist attacks on the gold standard Prof. Krugman tediously resurrects and refutes straw man arguments drawn from marginal thinkers. Prof. Krugman sets his phaser on stun and points it at the ghost of Ayn Rand rather than tangling with his peers. But boiled to its essence, Krugman's sciencefictiononomics is a tug of war between believers in mathematical modeling and believers in common sense. One also can cast this as a war between elitists (i.e believers in the ability of an elite to manage society’s affairs better than can the society itself) and populists (i.e. believers in the ability of society to manage its own affairs better than an elite can do so for it).
"Monetary Policy Is Bankrupt" Dr. Lacy Hunt Warns "Bonds, Not Stocks, Are A Good Economic Indicator"Submitted by Tyler Durden on 02/27/2015 19:35 -0400
"While the wealth effect is a theoretical possibility, it is not supported by economic fact. The stock market is not a good guide to the economy, but...the bond market is a very good economic indicator. When bond yields are very low and declining it’s an indication that the same is happening to inflation and that economic activity is weak. The bond yields are not here for any fluke of reason. They are here because business conditions in the US and abroad are quite poor."