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Guest Post: Is The Global Recovery Self-Sustaining?

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

To claim a "recovery" based on unlimited Central State borrowing and spending and central bank manipulation of asset valuations is self-sustaining is beyond absurd.

 
The mainstream media (MSM) is overflowing with stories proclaiming the global economy is on the mend: Europe's crisis is in the rearview mirror, China's growth has rebounded, Japan is aggressively pursuing Keynesian Nirvana and the U.S. economy is in the sweet spot between resurgent housing prices and ever-higher corporate profits.
 
This reality is the reason global stock markets have surged: everything's getting better.
 
The goal of every Central Planning scheme on the planet is a self-sustaining recovery:that is, one that doesn't require another couple trillion dollars, euros, yen or yuan to keep it from collapsing in a heap.
 
Though the conventional punditry is hesitant to declare victory, by reading between the lines we know the basic propaganda thrust: we are over the hump, the recovery (in housing, stocks, bat guano, etc.) is now self-sustaining.
 
Really? Based on what engine of growth? If we cut through the Keynesian jargon of aggregate demand and other Cargo-Cult mumbo-jumbo, what we find is the Status Quo is hoping to boost its precious aggregate demand with the same bag of tricks that imploded so spectacularly in 2008: the wealth effect based on phantom collateral created by Centrally Planned asset bubbles.
 
Central Planners in America have had remarkable success in inflating an asset bubble in stocks--five year highs!--but alas, the wealth effect is limited by the inconvenient reality that only the top of 10% of households own enough stock to feel any wealth effect from a market that has more than doubled in four years of Fed intervention and unprecedented fiscal profligacy.
 
That leaves housing as the only widely held asset that can possibly generate a wealth effect in more than the top 10% of households. This explains the Federal Reserve's frantic campaigns to reflate housing prices: buying 10% of all outstanding mortgages in 2009-10, and then setting out to buy another 10%-20% in an unlimited mortgage buying program announced in 2012.
 
Add $1 trillion+ in Treasury bond purchases designed to keep interest rates negative when adjusted for inflation, and the Fed is literally pulling out all the stops to reflate housing with historically low mortgage rates.
 
I covered this recently in The Rise and Fall of Phantom Housing Collateral (December 13, 2012).
 
With the Fed's unspoken collusion, lenders have reduced housing inventory by keeping foreclosed and defaulted homes off the market. By driving supply below recession-weakened demand, the Fed and lenders have managed to trigger bidding wars that have boosted home prices by 20% or more in beaten-up markets.
 
By keeping interest yields at less than zero, the Fed has effectively driven "hot money" seeking a yield into stocks and housing; as a result, investors and prospective flippers account for 30%+ of home sales.
 
Nothing is too grandiose for Central Planning, of course, when the goal is to save the banks from having to mark their vast portfolios of defaulted and foreclosed mortgages to market, or forcing them to liquidate millions of impaired properties. Saving crony capitalism from itself is the raison d'etre of Our Expansionist Central State (video presentation).
 
But inflating asset bubbles to create phantom collateral to support the much-desired borrowing-and-squandering of debt-based aggregate demand has a funny little self-destruct feature: the phantom collateral vanishes, leaving behind the debt, which still must be paid. And all those heavy monthly payments on old debt leaves less income to spend on stuff.
 
In other words, asset bubbles and debt based on phantom collateral crush real demand based on rising income.
 
In the last Fed-engineered asset bubble, mortgage debt doubled to more than $10 trillion from a previous base of $5 trillion. The phantom collateral soon disappeared, leaving homeowners owing the extra $5 trillion: the pleasure boats, fine dining and exotic vacations of debt-based aggregate demand are long forgotten, but the debt payments are still around and must be paid monthly.
 
 
The aggregate demand so beloved by Keynesians was all based on debt rising faster than either GDP or household income: As a percentage of disposable personal income, mortgage debt rose from 53% in 1960 to 113% in 2003. Mortgage debt rose from 50% of GDP in pre-bubble years to 79.3% of GDP--an astounding rise of 30% in a mere decade of home-equity-extraction, borrow-and-blow gluttony.
 
When this unsustainable acquisition of debt finally hit the wall in the 2008-09 global financial meltdown, debt's unyielding rise stutter-stepped and slowed, as the collateral underlying that debt vanished into thin air.
 
 
Never fear, the Expansionist Central State to the rescue. When one debt bubble bursts, crimping the consumerist orgy of "aggregate demand," then the State creates a new debt bubble--in this case, a $1 trillion student-loan monster that has turned a significant percentage of an entire generation into debt-serfs.
 
 
Since the collateral supporting Federal debt is presumed to be infinite, so too is the Central State's line of credit: need $6 trillion to prop up a crony-capitalist, hopelessly corrupt and inefficient Status Quo? No problem.
 
 
Though you will not find a Keynesian pundit or economist with the courage required to admit it, the same problem of phantom collateral applies to Federal and state debt: the consumption all that debt funded is soon forgotten, but the debt remains to be paid, essentially forever.
 
The collateral supporting Federal debt is also phantom. Printing money is not the same as creating surplus value; that requires actual work and capital, and it is intrinsically limited by the cost-basis of production and market forces.
 
To claim a "recovery" based on unlimited Central State borrowing and spending and central bank manipulation of asset valuations is self-sustaining is beyond absurd. Aggregate demand (i.e. debt-based spending) supported by phantom collateral is not sustainable, no matter how many times Keynesian Cargo-Culters and Federal Reserve governors dance around their flickering little camp fire waving dead chickens.

RIP: Our Expansionist Central State (23 Minutes, 25 Slides) CHS with Gordon T. Long:

 

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Tue, 02/05/2013 - 13:25 | 3216727 MFLTucson
MFLTucson's picture

This is the same media that thinks Obama is a messiah while he has destroyed your civil rights, the middle class and any hope of a recovery!

Tue, 02/05/2013 - 13:53 | 3216847 Sudden Debt
Sudden Debt's picture

that white bird circling high above your house?

not a bird....

Tue, 02/05/2013 - 14:13 | 3216905 redpill
redpill's picture

Global recovery?  What the fuck are you talking about, Chuck?

Tue, 02/05/2013 - 15:24 | 3217177 Sudden Debt
Sudden Debt's picture

After Obama takes your guns away, he should also forbid Americans to curse.
I think only terrorists curse because it sounds dangerous.
So in a way... when the second is gone why have a first right?

Tue, 02/05/2013 - 15:28 | 3217186 mightycluck
mightycluck's picture

I agree. Too many Zandis out there!

Tue, 02/05/2013 - 14:22 | 3216942 Renewable Life
Renewable Life's picture

Recovery? I don't think so, new massive bubble, Hell Ya!!!

True Story, I bought a foreclosed townhouse 2 years ago, here in the tax addicted State of California, for $100,000.  I told my wife, if this sucker is worh $125,000 in 10 years, we will be happy, but we needed a place for family, so we buy it!  I look up the listing of a neighboring unit this week (same sg footage) that just went up for sale, listing it at $168,000!!!!!

I almost fell out of my god damn chair!  Crime is up everywhere here, unemployment is higher then two years ago, my god damn truck was stolen last month, taxes are WAY UP, and this bitch has appreciated $68,000 in 24 months!!! I'll be selling into this hysteria this time, but its still madness!!! Welcome to the recovery!

Tue, 02/05/2013 - 15:01 | 3217099 pursueliberty
pursueliberty's picture

You need one more year for tax benefits.

 

I just refie'd a rental last week at 3.5% 15 yr, 4 year balloon.  My cheapest refi to date.  Home appraised for 25% more than in december of 2010 when I purchased it (not a foreclosure).

Around my area this insanely low rates have but a nice upward trend on housing prices, they aren't selling a record amount, but what is selling is at record prices.  We never had a housing boom/bust, just a nice steady appreciation over the last 10 years.  The last two years have seen the average selling price rise a hair under 10%.

I'm in arkansas.

Wed, 02/06/2013 - 23:19 | 3222129 Ballin D
Ballin D's picture

Its 2 years as a primary residence for tax benefits.

Tue, 02/05/2013 - 13:25 | 3216737 traderjoe
traderjoe's picture

Um, no?

Tue, 02/05/2013 - 13:36 | 3216782 xtop23
xtop23's picture

Um, no.

Fixed. No question mark needed.

Tue, 02/05/2013 - 13:54 | 3216805 Banksters
Banksters's picture

Credit can't expand if wages fall, unless standards of lending are reduced.   Of course, that didn't stop bernank and the us govt from bailing out failed banks with zero percent cash and massive guarantees.  

We are in the end game of debt expansion and usury,  The only thing left is war to keep the spotlight off of the cancerous parasites of modern central banking and their proxies.

UPDATE

Maybe there is a solution, We could package this debt into 'products' and sell them to dumb money pension fund manages, thereby increasing credit and expanding the economy.  Oh, wait....

 

Tue, 02/05/2013 - 14:06 | 3216884 BLOTTO
BLOTTO's picture

~SNAFU~

Tue, 02/05/2013 - 13:25 | 3216738 kito
kito's picture

if this charade continues for 7 more years, im converting to keynesianism...........i shall create buddah-esqe statues of bernanke and pay homage to him by traveleing barefoot to the eccles building.......................

Tue, 02/05/2013 - 13:38 | 3216788 centerline
centerline's picture

I will shave my head and join you said journey to the holy land.

Tue, 02/05/2013 - 13:44 | 3216812 kito
kito's picture

bernankeeeeeeohhhhhhmmmmmmmmmmmmm...................................................

Tue, 02/05/2013 - 13:48 | 3216833 centerline
centerline's picture

http://www.youtube.com/watch?v=e4q6eaLn2mY

Obligatory monk video.  My apologies in advance.

Tue, 02/05/2013 - 14:52 | 3217069 Lohn Jocke
Lohn Jocke's picture

Do Keynesians Rub Bernanke's head for good luck?

Tue, 02/05/2013 - 13:54 | 3216848 Sudden Debt
Sudden Debt's picture

McDonals? why would you shave your head for that?

Tue, 02/05/2013 - 13:41 | 3216799 syntaxterror
syntaxterror's picture

I'll worship any man that can make 100 dollars of loans to failed global banks with only a few billion in real assets. Quite the spiritual mastermind he s.

Tue, 02/05/2013 - 13:25 | 3216739 mayhem_korner
mayhem_korner's picture

 

 

With that headline, you're gonna compete with CNBC for top billing on the sheep's Google searches.

Tue, 02/05/2013 - 13:33 | 3216748 JOYFUL
JOYFUL's picture

yabba, yabba...all the charts and eyeglazing overthetop I covered this here of a Reggie Middleton piece, with none of the frisson of danger and excitement that comes from wearing a loin cloth to work in mid-winter Manhattan...

Time for some real news...

February 6 -2012\ for immediate release.

Zerohedge is pleased to announce that they have secured the services of internationally reknowned precious metals analyst Jon Nadler. After a distinguished career as a commentator for Kitco Metals Inc., Jon has expressed an interest in moving on to new challenges in the industry to which he has given so much. We are happy to accede to his wish!

Joining Jon in a rotation of 'top flight' metals analysts will be Clive Maund, a man who's never seen a chart he couldn't paint to the downside, and our own MDB, lending a levelling voice of sanity to the often 'over-exuberant' gold market. This new look for 'the Hedge' is sure to take some readers by surprise, so Jon has kindly agreed to bring along with him from Kitco the ever efficient Ynot2K as his executive assistant. Ms Knot will serve as the long-called for 'moderator' of our readers forum,

We are certain that this new power-packed lineup will earn the full attention of our loyal audience, and look forward to your feedback about our roster of precious metal superstars!

Tue, 02/05/2013 - 13:29 | 3216749 fuu
fuu's picture

Only if the printing presses are run by perpetual motion engines.

Tue, 02/05/2013 - 13:31 | 3216757 ebworthen
ebworthen's picture

ABC News radio reporting the recovery is here, housing and employment on the mend, without any mention of the debt and unfunded liabilities.

DOJ going after one-half of the rating agencies instead of the corrupt banks and bankers who securitized mortgages and fixed LIBOR rates themselves.

Spackling paste on a cracked foundation, whitewash on a blood-stained building.

"No crime, no murder, no problems; now go buy something."

Tue, 02/05/2013 - 13:44 | 3216814 IamtheREALmario
IamtheREALmario's picture

It cracks me up ... who paid the ratings agencies? The people who benefitted from the corrupt ratings. Seems like a clear case of conspiracy to me.

Tue, 02/05/2013 - 13:32 | 3216759 JustObserving
JustObserving's picture

Is Global Recovery a euphemism for Global Printing?  

There is no problem that self-deception cannot solve.

Tue, 02/05/2013 - 15:16 | 3217156 alfbell
alfbell's picture

 

 

 

There is no problem that self-deception cannot solve.

JustObserving: very well put. That is the basis behind the criminal minds of our politicians and bankers too, zero lack of conscious.

This is total confusion. We are on a runaway train that is continuing to gather speed and force. We're all caught on it and no one can really get off. How do prepare for a train crash?


Tue, 02/05/2013 - 13:32 | 3216760 DaveyJones
DaveyJones's picture

are the current physical resource systems self sustaining?

Tue, 02/05/2013 - 13:58 | 3216860 Sudden Debt
Sudden Debt's picture

welll... yeah!

look:
you buy something.
they run out.
they take it back from you.
and than you can buy it again!

THE NEW CAPITALISME!!

Tue, 02/05/2013 - 13:37 | 3216783 thismarketisrigged
thismarketisrigged's picture

what global recovery is this you speak of?

Tue, 02/05/2013 - 13:45 | 3216820 Ms. Erable
Ms. Erable's picture

The recovery in which the globalists and corporate controllers recover all of the assets they've permitted you to hold. Now shut up, be a good slave, and work harder for your owners.

Tue, 02/05/2013 - 14:14 | 3216909 kill switch
kill switch's picture

What a great recovery:

 Barnes&Noble Closing 240 stores

 Sears Holding Closing 225 stores

 J.C. Penny Closing 350 stores

 Office Depot Closing 150 stores

 Gamestop Closing 600 stores

 Office Max Closing 175 stores

 Radio Shack Closing 550 stores

 

Doing just great..And housing bubble rev 2 about to burst. That didn't take long..

 

 

Go long CMBS

Tue, 02/05/2013 - 13:39 | 3216791 dick cheneys ghost
dick cheneys ghost's picture

Cant wait to take on moar DEBT. I will do my part to help this great country!!

 

Keep sending those credit card offers in the mail.........I will max them out as soon as i get them!!

 

 

Tue, 02/05/2013 - 13:40 | 3216795 thismarketisrigged
thismarketisrigged's picture

this asshole jim cramer thinks a recovery is well underway. i want to punch him

 

http://www.cnbc.com/id/100434754

Tue, 02/05/2013 - 13:42 | 3216803 syntaxterror
syntaxterror's picture

Recovery Summer IV is almost upon us!

Tue, 02/05/2013 - 14:37 | 3216999 SmallerGovNow2
SmallerGovNow2's picture

cramer is a freak and total tool / stock market shill...

Tue, 02/05/2013 - 13:46 | 3216806 centerline
centerline's picture

Charles - you as well as the rest of us know that governments around the world have gone full tilt on the propoganda.  Since the banks own them and everything else, it really isn't that hard for them to yank all the strings at once.

It is laughable to us who pay attention.  But, the sheeple eat this stuff up.  Shit, it is possible now to tell them one thing - then contradict it the next day and they don't even blink.  And if they do, just throw out some gay rights, abortion, left/right, etc. noise.  So easy a caveman could do it.

Tue, 02/05/2013 - 13:42 | 3216807 syntaxterror
syntaxterror's picture

In 10 years, will we still "be in recovery"?

Tue, 02/05/2013 - 14:10 | 3216898 NoDebt
NoDebt's picture

Yes.  In communist and dictatorial regimes they often use the phrase "glorious people's revolution".  The phrase "economic recovery" rings today as hollow in the US as that communist phrase did in those countries.  Nobody is allowed to say "there is no recovery, we're going backwards."  We will ALWAYS henceforth be in "recovery."  Sometimes it will be "steady" recovery, sometimes it will be "slow" recovery, but EVERYTHING is in recovery at all times.  Pay no attention to your perceived impoverishment- you are recovering.  It's your perspective that's lying to you, not your government.

 

 

Tue, 02/05/2013 - 15:57 | 3217294 Spastica Rex
Spastica Rex's picture

Dystopian scenarios are so 1984.

Tue, 02/05/2013 - 13:51 | 3216809 papaswamp
papaswamp's picture

Moar corn syrup!

Tue, 02/05/2013 - 13:43 | 3216811 SheepDog-One
SheepDog-One's picture

SURE the 'global recovery' is 'self-sustaining'...just as long as we can keep adding at least $1.2 trillion debt yearly and peg interest rates at 0%, should work FINE!

Tue, 02/05/2013 - 15:38 | 3217218 TheGardener
TheGardener's picture

Peak growth!

GDP growth , counting fabulous services , even in banking and insurance is ridiculous , only war will meet the ever expanded "growth" criteria. High inflation and thus
unadjusted nominal growth can be sustained for some time
with obsolete old Nokia phones costing 6 $ on ebay remaining
in the CPI basket compared to the 600 $ gadget that keeps
the stock market on life support.

But real growth ? As in being able to swapping your beetle for a merc , paying the difference in cash ?

Tue, 02/05/2013 - 13:45 | 3216821 Everybodys All ...
Everybodys All American's picture

The media is counting on you being dumber than an empty box and for the most part they are right.

Tue, 02/05/2013 - 13:49 | 3216835 Cult of Criminality
Cult of Criminality's picture

"Guest Post: Is The Global Recovery Self-Sustaining?"

Made me laugh out loud again !

Tue, 02/05/2013 - 13:56 | 3216855 Sudden Debt
Sudden Debt's picture

looking at our industry numbers... there's no recovery what so ever....
and believe me, everybody realizes it.

but what the media makes you believe is that your case is the only case.

sales managers all over are getting nuts and fired.

Tue, 02/05/2013 - 14:09 | 3216895 centerline
centerline's picture

That's exactly the situation.  My wife has said it too many times about other people around us "doing so well."  Meanwhile, she hasn't a clue as to thier personal finances.  And, funny enough, she is ignoring the handful of friends she has who "appeared" to be doing well and melted down over night - lol.

Funny story there is that one of her friends appeared to have it "all"... fancy cars, house was rennovated all the way, no apparent worries, eating out all the time, designer stuff, vacations, etc.  Suddenly, out of nowhere, the marriage goes south.  The divorce uncovers that they had each hidden somewhere in the area of $70k on credit cards, loans, etc. from each other.  

Amazing how people these days simply block any thoughts of anything contrary to what they are told to believe, want to believe, etc. - especially if the "Joneses" are involved.  Completely irresponsible and completely on purpose thanks to decades of corporate brainwashing.

Tue, 02/05/2013 - 15:21 | 3217167 Sudden Debt
Sudden Debt's picture

Yeah, We have friends like that to.
But one evening he told me that every month he went 1000 to 2000 euro's in the red.
That was years ago.
And they kept spending. vacation after vacation, car after car... My wife also constantly said: look at how they are doing.
Now we do well, but I'm a greedy bastard, in which I mean I like to save a lot and invest a lot. that's how we are well off. not by spending every penny.

But they kept spending and spending untill one evening he came to my door.
Asking if I could borrow him 200k... I asked him if he was nuts and why for. He told me his wife had cancer....
I talked it over with the misses but the sum was to high to risk it.

than it turned out she never had cancer and it was all a lie.
They lost the house, the cars, and also devorced.
Now they both are at the bottom. debt is killing them.
they life seperate, can't afford another relationship, live in a small studio... just sad.

And when I look to my other friends I see the same patern. I'm one of the best concerning job but I don't drive a porche, I don't take 5000 euro vacation trips per person,.. so they way they do it is pretty clear.
debt over debt untill you're getting to old to be ever able to repay it all.

Banks look at your age, and when a 30 year guy enters, they say: he has his entire life to pay the interest.
when a 40 year guy enters they start thinking
when a 50 year guy enters they say: do you own your house? what else is yours?

Tue, 02/05/2013 - 17:44 | 3217742 TheGardener
TheGardener's picture

Thanks for sharing your common misery sudden debt of which coming out of the blue would have fetched you quite some indiscriminate down marks on this board. We thought we know you, but you are just another loser here for a reason.

You, sudden loser ,never pretended more than you just confessed, and that's why you got through the vetting
process to start with here employed at fight club . Ain`t punching,
Best regards.

Disclaimer : I too have friends buying houses and partners
with temporary gains but they do drive at least a Porsche
and not just for style, that would cut with me for the time
being. Margin call on my marginally rich friends is another
story, I know what you are talking about.

Tue, 02/05/2013 - 14:00 | 3216867 rotagen
rotagen's picture

It's all fake, jim.

Tue, 02/05/2013 - 14:33 | 3216979 JR
JR's picture

It is the “penalties inflicted on thrift and productive investment that have nurtured an ‘eat, drink and be merry for tomorrow we die,’ philosophy.

Those are the words of economist John Semmens, who also said:

”It was Keynes himself who said…’in the long run we’re all dead.’ True to his word, Keynes is dead, leaving the rest of us to reap the harvest sown by policies based on his theories.”

And adds this:

“Possibly the most damaging effect of the inflating-taxation policy is the destruction of truth in both financial reporting and policy discourse. The disintegration of the monetary unit goes a long way toward invalidating corporate annual reports. Even worse, this distortion pollutes the price system and upsets the balancing and allocating functions performed by the system.”

With this:

“Keynesian economic theory has done more to promote the resurgence of the ’barbarous relic’ than all hoarders and speculators could ever have hoped to achieve. Which only goes to show that in the long run, crime does not pay.”

And that’s the beef with this “recovery," Charles; there’s no beef.

Tue, 02/05/2013 - 19:38 | 3218153 SKY85hawk
SKY85hawk's picture

Keynes also said the additional debt must be paid back during the good times.

     Remember "Surpluses as far as the eye can  see" in 1999-2000?

 

I wonder why few/none of the financial pundits try to remind people

     that eternal debt creation WAS not part of Keynes' thinking?

I'll tell you why, 

because every Voter buys FAVORS from the Politicians

      AND every Politician sells votes for FAVORS.

 We have only ourselves to blame for the irresponsible abuse of the Public Checkbook!. 

New concept, starve the beast & we have begun to take back control of our country.  It happened in Czechoslovakia and Hungary, see VELVET Revolution.



Tue, 02/05/2013 - 20:09 | 3218245 JR
JR's picture

Well, perhaps the economists such as Krugman don't mention that Keynes's proposed debt should be paid off in the good times because we've never seen good times unless they come in a "free lunch" bucket,

Keynes interpretor, Hunter Lewis, says that "Keynes offered defict spending as an example of what economists today call a 'free lunch.' it is 'free' because the resulting economic growth should provide all the tax money and more needed to service and eventually retire the debt.

"This is completely fanciful," says Lewis. "Only ask Japanese government, whose debt to gross product has almost tripled* since the collapse of thier late 1980s bubble and the beginning of Keynesian therapy." -- Where Keynes Went Wrong (2009)*

As Lewis points out, in the U.S. we've been operating on Keynesian principles since World War II. "The government has printed money. Debt levels have grown. We have not only gotten inflations and bubbles. We have also gotten less and less growth for each increment of debt."

And, now, Bernanke is quantatively printing in the trillions while Wall Street's is gulping down their "free lunch." The last time it ended in a crash. Keynes postulates: "But we cannot declare that conditions of inflation have set in until unemployment has completely disappeared." Too bad Keynes didn't define "unemployment," or that a time bomb could explode.

Tue, 02/05/2013 - 15:17 | 3217160 alfbell
alfbell's picture

 

 

"There is no problem that self-deception cannot solve."


JustObserving: very well put. That is the basis behind the criminal minds of our politicians and bankers too, zero lack of conscious.

 

This is total confusion. We are on a runaway train that is continuing to gather speed and force. We're all caught on it and no one can really get off.

 

How do prepare for a train crash?

Tue, 02/05/2013 - 15:35 | 3217206 Milestones
Milestones's picture

Excellent article. We have a self sustaining economy with ONLY government as an impediment. Huh?? Gawd bless O'blah blah and his several predsessors. Argentina, Spain and Italy are now laying out what is coming.         Milestones

Tue, 02/05/2013 - 15:38 | 3217221 q99x2
q99x2's picture

It is sustainable if the bankster President says it is. Otherwise he'll put you in the cornfield.

Tue, 02/05/2013 - 19:26 | 3218117 SKY85hawk
SKY85hawk's picture

under a pile of bat-guano?

Tue, 02/05/2013 - 16:33 | 3217439 q99x2
q99x2's picture

Nice presentation. I saved it in case someone ever wants to know what happened.

Tue, 02/05/2013 - 16:34 | 3217443 eaglerock
eaglerock's picture

Luv ya Charles, but enough with the Cargo-Cult shtick.

Tue, 02/05/2013 - 23:22 | 3218412 michael_engineer
michael_engineer's picture

"the Status Quo is hoping to boost its precious aggregate demand with the same bag of tricks that imploded so spectacularly in 2008: the wealth effect based on phantom collateral created by Centrally Planned asset bubbles."

My take is that "demand" as a player is ancient 20th century history and is only visible in the rear view mirror. Get over it. The new normal is that "supply" is now firmly in the drivers seat, and supplies are running lower for core raw materials and energy and that would be "structural".

Wed, 02/06/2013 - 00:06 | 3218921 Lord Of Finance
Lord Of Finance's picture

The reason why Keynes was so successful in gaining the admiration of so many politicians was because he was so much like every other lawyer politician. 

    He, just like them, was a morally depraved glad handing bullshit artist with a dead conscience.

 

  In the future, please put this litmus test to use whenever deciding who to vote into any office or position of policy power, if the candidate has a law degree, do not cast your vote for them. If the dipshit sheeple would apply this litmus to their voting choices we would all see marked improvement in the function of government.

Do NOT follow this link or you will be banned from the site!