keynesianism

The Path To The Final Crisis

We cannot be sure what shape the next crisis will take, although it seems likely that it will be yet another “deflation scare”, mainly caused by falling asset prices. However, we do know what the last crisis of the current system will look like. It will entail a crumbling of the public’s faith in fiat money and the institutions that issue and administer it.

Another Volcker Moment? Guessing The Future Without Say's Law

If the dollar’s purchasing power falls much further, the market will expect higher interest rates, so this then becomes the likely outcome. The question will then arise as to whether or not the Fed will dare to raise interest rates sufficiently to stabilise the dollar's purchasing power. If the Fed delays, it could find itself facing a difficult choice. The level of interest rates required to stabilise the dollar’s purchasing power would not be consistent with maintaining the record levels of debt in both government and private sectors. Thirty-six years on it could be another Volcker moment.

The Cashless Society - Keynesian "Stability" Vs Trumpian Turmoil

"Keynesianism has always been at war with savings since its principle tenet is that savings are bad, consumption is good. The Keynesian central planning authorities at the Fed and elsewhere would like to see a cashless society because keeping cash can be a form of savings instead of consumption. I think we are headed toward a cashless society unless the public wakes up and begins to protest this... which is why the establishment despises Trump as the figurehead for this awakening...If I were Donald Trump I would also double or triple my personal security detail."

"There Is Definitely Something Strange Going On" In Sweden

"Some 92% of those unaccompanied migrants were male last year...  there is definitely something strange going on. More than half of the world’s refugees are women. In World War II, when Sweden took refugees from Finland, they were children and 90% were below the age of 10. But now almost all of them are late teenagers – supposedly; we know many are older for a fact... If you have an open door policy and you are incentivizing Afghans to take advantage of the system, can you really blame them?"

Has The Market Crash Only Just Begun?

"There is massive cognitive dissonance here... the crash has only just begun... The "let's make a deal" market is choosing monetary interventionism but when that door is slammed open, we will see that dreaded black swan monster."

Keynesianism's Long March To The Dustbin Of History

The whole Keynesian regulatory structure is going to collapse. Why? Because we are reaching an inflection point. We are reaching the point at which the exponential curve turns sharply upward. This is good news for liberty, and it is bad news for the arrogant theorists of Keynesian central planning, the arrogant tenured bureaucrats of central banks, and the protected employees of virtually every other government-regulated industry or profession. They are presiding over the final stages of the illusion of central planning.

Brazil's Easy-Money Problem

Brazil’s current crisis is nothing but an outcome of government’s meddling with the market. The scenario of the country’s economy is indeed scary, but we have reason to believe that Brazil’s intellectual situation is going through a new and promising change. It may be true, as Lord Keynes said, that “in the long run we are all dead,” but if we are to get out of this terrible crisis, to prosper and to enjoy a constant improvement in our standard of living, “it is high time to transform the country’s state capitalism into a free market system.”

Exposing The Fiction Of Mainstream Macroeconomics (In 9 Simple Questions)

The game is simple: we know that macroeconomics is a fiction from top to bottom, the challenge is to expose it as such. Here are some apparently innocent questions to ask of economists, journalists, financial commentators and central bankers, which are designed to expose the contradictions in their economic beliefs. A pretence of economic ignorance by the questioner is best, because it is most disarming.

We Know How This Ends - Part 2

In the end we all know that “informal central bank cooperation” doesn’t really amount to anything.  That lesson could be applied to the Bundesbank “selling dollars” in 1969, the PBOC “selling UST’s” in 2015 or the worthless, useless Federal Reserve RRP in 2016.  They really don’t know what they are doing, they never have and it truly doesn’t matter fixed or floating.  Adjust accordingly because we know how this ends; we’ve already seen it.

China Warns No "V-Shaped" Recovery Is Coming; Says "There Will Be No Strong Economic Stimulus"

Maybe because not enough people caught the dire warning the first time, moments ago Bloomberg reported that Han Jun, the deputy director of China’s office of the central leading group for financial and economic afairs, spoke at an event at the Chinese consulate in New York and practically reiterated the anonymous source's warning practically verbatim. To wit: "There won’t be a strong economic stimulus and people shouldn’t expect a V-shape recovery; instead long period of L-shape growth path is likely" said Han, who participated in the drafting of China’s latest five year plan.

Cacophony Of The Clueless - FedSpeak Reaches Peak Confusion

Superficially one gets the impression that they aren’t really trying to “explain” anything to the hoi-polloi, since it all sounds remarkably uncoordinated. To the extent that the messages are contradictory, they merely reveal the literal impossibility of central planning – neither Dudley nor Evans can possibly know at what level short term interest rates should be set.

Hawks, Doves & Chickens

The Fed remains in a box of its own making. We are beginning to doubt whether central bank will ever be hike rates again voluntarily. What is however eventually highly likely to happen is that the markets will force the Fed to act – or as Bill Fleckenstein puts it, “the bond market may take the printing press away from them”.

Mapping The Crisis Contagion Process: The Flowchart

How did the world manage to go from one acute crisis to mutliple acute crises in the space of seven years despite trillions in central bank asset purchases, you ask? Here's the crisis contagion roadmap to help explain.

The Age Of Voodoo Finance

 

The Jackson Hole gathering may end up providing at least some clarification, but not even close to the manner in which everyone seems intent on inferring. With Janet Yellen’s notable absence, there isn’t the same sort of celebrity about what would have been the media hanging upon every word; that is, after all, what the Federal Reserve has become, not an organ of stability or even expertise but a public relations effort aimed squarely at trying to convince everyone possible that it is. Given the unique circumstances at the moment, the real issue is not whether they might raise rates but just how much systemic misdirection has already been revealed even to the least attentive of people.