Central Banks Have Failed Because They Can't Push Wages Higher

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

You can print all the money you want, but it will never boost wages to keep up with prices.

Central banks have been pursuing two goals for the past six years: ignite inflation and an expansion of debt that will supposedly generate "growth." Despite squandering trillions of dollars, yen, yuan and euros, central banks have failed to ignite sustainable inflation or growth.
 
There's nothing mysterious about their failure: you can't get "good" inflation or growth if wages are stagnant or declining.
The central banks don't bother to distinguish between "good" and "bad" inflation: any and all inflation is considered not only wonderful but essential to propping up the Ponzi scheme of debt-dependent consumption, a dynamic I described in Central Banks Create Deflation, Not Inflation.
 
"Good" inflation is wages rising faster than prices. When wages rise faster than consumer prices, households have more money to spend on consumption, and it's progressively easier for them to pay down debt and support additional borrowing.
 
"Bad" inflation is prices rising while wages stagnate. In "bad" inflation, prices keep rising as central bank money-printing devalues the currency, but wages don't rise along with prices. As a result, wages decline in real terms, i.e. purchasing power.
 
In Japan, where the central bank and government have struggled for years to generate price inflation as the means to "re-start growth," wages have fallen by 9% in real terms since 1997. (source:Voodoo Abenomics: Japan's Failed Comeback Plan Foreign Affairs)
 
I explain this in further depth in Inflation Is Not "Growth" (July 23, 2014).
 
These charts reflect the stagnation of American wages and household incomes.
 
Real household income has declined across the entire income spectrum:
 
 
Deduct healthcare expenses and debt service, and what's left of wages for the rest of life's expenses is tanking: Courtesy of longtime correspondent B.C.:
 
 
Meanwhile, the purchasing power of wages is in steady decline:
 
 
The point is that lowering interest rates to zero and issuing unlimited free money for financiers to generate asset bubbles has had a negative effect on wages and household income. This is not accidental or bad luck--central bank money-printing and bond-buying have not had any positive effect on wages because they cannot possibly have any positive impact on wages.
 
In effect, central banks have been trying to pound nails with a handsaw: they don't have the tools to counteract the deflationary influences of labor surplus. Wages are stagnating/declining not because money isn't cheap enough or assets aren't high enough; wages are in structural decline due to three factors:
 
1. Global wage arbitrage: everybody is competing with everyone else globally for work that is tradable or that can be commoditized
 
2. Costly human labor is increasingly replaceable with software and robotics
 
3. The rising costs of labor overhead (social welfare taxes, healthcare, etc.) push employers' costs higher even as employees' paychecks stagnate or shrink.
 
These are global factors, affecting employers everywhere from the U.S. to China. No amount of liquidity or free money can reverse these structural trends.
 
Frantic voices can now be heard suggesting central banks issue free money directly to households. Considering central banks have stolen hundreds of billions of dollars in interest from saver-households in the past six years, there is a painful irony in these calls for free money to households, now that free money for financiers has failed so catastrophically.
 
free money giveaway won't fix anything; all it would do is give households the means to pay down a bit of debt or make interest payments on subprime auto loans for another month or two. Free money giveaways are not a substitute for earned income.
 
Debt jubilees won't work either, as all the debt that proponents want to cancel is an asset to somebody else--and often that "somebody" is a public or private pension fund or another worker's 401K retirement fund.
 
The game has been lost, but central bankers are still on the field, wandering around in disbelief that their unspeakable powers to issue money and credit have failed. You can print all the money you want, but it will never boost wages to keep up with prices.

 

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Eyeroller's picture

Also, central banks have failed because YOU CAN'T MAKE PEOPLE SPEND.

GetZeeGold's picture

 

 

When does McDonalds get their robo flippers?

 

I pine for the days of the 99 cent McDouble......it's my life and my choice marxist bastards.

halfasleep's picture

sorry charlie - normally you're spot on, but this presumption is wrong: "Central banks have been pursuing two goals for the past six years: ignite inflation and an expansion of debt that will supposedly generate "growth."" They couldn't care less about the plebes wages.

 

GetZeeGold's picture

 

 

Not even illegial alien plebes wages?

SWRichmond's picture

Central Banks are failures because they attempt to change reality.

JR's picture

Reality: An American well trained. Top expert. No longer able to own his own small business. Only paid a salary. Highly taxed. In the private sector, faced with no capital to live on in old age, in a time of high inflation.  “A man in his fifties, an employee, seeing into a future without enough money. An enforced retirement. No house of his own. No power.”

And, if he is “retired,” a 1.7% Cost of Living Adjustment (COLA) in his “social security” for 2015; and, if he’s young, unable to “retire” until age 67 on his devaluing and redistributed “social security.” What was that about banker sharing?

The American Dream.

zerozulu's picture

Debt jubilee can boost economy.

El Diablo Rojo's picture

What a stupid article.  Their intent was never to push wages higher.  If one believes that, I got Fukishma rocks to sell you.

JR's picture

Debt jubilee is a penalty on the responsible; and a reward for the irresponsible. It is sweeping moral hazard, with the responsible man who through years of labor paid his debts and realized ownership of his property vs. a neighbor, heavy in debt, who suddenly owns his property outright, overnight,via a gift from the State.

This is a perversion of economic justice, a basis for legal plunder, the ultimate in socialism. Overriding it all, it is a body block to incentive and ambition to work for a goal when the government simply changes the rules and negates your hard work. It is Zimbawism with bail for the profligate.

I agree with Hugh-Smith: "Debt jubilees won't work either, as all the debt that proponents want to cancel is an asset to somebody else--and often that 'somebody' is a public or private pension fund or another worker's 401K retirement fund."

Usurious's picture
Usurious (not verified) JR Dec 10, 2014 2:26 PM

 

 

we should demand a jubilee from the interest (usury)

JR's picture

But under the current system...

“Wholesale debt jubilee would so scare investors that in the future they would demand excessively high interest rates in exchange for loans causing a lack of credit which would endanger our whole economic system... In the meantime, we should not forget that countries, and people, who come out of the crisis with a reputation for honest dealing and prompt repayment are the ones that will have easier credit and a greater chance of prosperity in the coming decades.” – Edmund Conway, Why a Debt Jubilee Is Not the Answer to Britain’s Prayers.

If we want to end wholesale usury, i.e., debt slavery control over the American people by the international bankers, we must put an end to the Federal Reserve System.

TSTM's picture

Debt Jubilee is a Biblical answer to our problem, but not in the way it is being discussed now. The Biblical Debt Jubilee occurs every 50 years. Borrowers know it is coming and lenders know it is coming and can thus borrow and lend accordingly. When you know that every 50 years all hereditary lands will be returned to the family descendants and all loan balances will go to zero, any debts created will be structured with this in mind, thus credit bubbles will have a built in limited lifespan. Also, usury is frowned upon, Biblically speaking, and when usury is combined with fractional reserve banking the result can only be a situation such as we find ourselves today.

If a debt jubilee were to occur in, say, ten years with a specific date given and the idea that it would be happening every fifty years henceforth, all the actors involved would begin to act accordingly and we might just pull off an orderly deleveraging and set ourselves up to create a prosperous economy again, if, and only if we end the Fed and return to sound money, not a fractional reserve gold standard (which is what we started with that got us here), but sound money. Real money and no fractional reserve banking which is the root of all evil.

JR's picture

But that proposal was for an ancient people whose sole authority was God. If Israel had followed the practice of debt jublilee faithfully under her primarily wayward kings, logic tells you it would have been a society without permanent property.

Consider this scholarly interpretation of Leviticus 25: 9-1, “The Year of Jubilee was meant to be celebrated every 50 years. It included canceling all debts, freeing all slaves, and returning to its original owners all land that had been sold. There is no indication in the Bible that the Year of Jubilee was ever carried out.”

Worse, America no longer considers herself a "nation under God; instead, her representatives bow to a central authority, the Fed, i.e., a godless banker-controlled State. No need to ask how that'd work out for ya.

But, I get your point. If only... Perhaps America's coming Debt Jubilee will be entitled Debt Default, like in student loans.

TSTM's picture

Agreed, I have seen no incication that it was carried out. Usury seemed to have grown very popular as well. 

I diagree with you about the no permanent property. The land would be permantly owned by its ancestoral lineage and any selling or buying would be seen as merely a long term lease and priced accordingly. Since everyone owns their own body, a person who had sold themselves into slavery (or was forced into it) would get a chance to change their mind or escape - if they lived that long. I have a problem with slavery. I just don't see how that could be OK, ever, but I do understand the concept of indentured servitude with an enforceable contract and a set time limit.

It will probably just be default by currency destruction and we'll just have to sort it out for ourselves. 

GetZeeGold's picture

 

 

I reserved this spot for my replacement from the south. Hopefully he won't double post and do my job for half the wages. Then my former employer won't have to buy me heath insurance.

NotApplicable's picture

Well, it's true to the extent that they want enough growth to support the overhead of their ponzi.

Eating the "goose that laid the golden egg" indefinitely though? Reality says otherwise.

Parasite 101

usednabused's picture

And they claim a debt jubilee wouldn't work because of what? Pensions and govt assetts? I say fuck that, reset the bitch.

acetinker's picture

Who gets hurt in a debt jubilee?  The very same ignorant, complacent fuckers who allowed the ship of state to run aground, that's who.

I say fuck 'em, they deserve it.

Dr Benway's picture

Jubilee is a complete fucking moot point. All that is needed is a restoration of true markets and price discovery.

 

This would involve a ~50% loss in the value of assets (property and stocks) that the towering shitpile of debt has been used to prop up.

 

Which for all intents and purposes is the exact same outcome as debt jubilee: debt is written off, the "assets" value is slashed.

acetinker's picture

Doc, lemme say this-  There are nowhere near enough actual assets on this planet (at current valuations) to support the various over-leveraged, re-hypothecated 'valuations'.

Thus, in this fantasy world, jubilee is termed moot.  But, you will find soon enough, whether planned or not, jubilee is inevitable.

It's a shit-ton more than 50%, btw, just so you know.

Woodyg's picture

Exactly!
The whole basis of the article is bullshit -
The central banksters are all about Consolidation of Wealth -

Using bs free dollars to buy Real Assets like art and an island in the Carribbean -

It's an ongoing global financial coup d'état -
Rising wages are the last thing these vampires want -

The_Dude's picture

Exactly....wage suppression is a feature, not a bug!

Jethro's picture

Not soon enough.  With their stock fiasco, I'd imagine that they probably aren't willing to R&D, then field a flagship "restaurant" even though it'd save them so much money later on to jump in with both feet RFN.  The first franchise to field burger-bots will beat the pants off of their competitors in probably less than a year.

Haus-Targaryen's picture

Central Banks have failed because they are run by the Tribe whos primary goal is to take over the world.  Has nothing to do with economic prosperity.  

Ghordius's picture

the Russian National Bank too? and the Chinese? how about the Iranian National Bank?

Haus-Targaryen's picture

when I look at the picture captioning this article -- I see Yellen and Draghi, and someone who stared into the sun for too long.  

Yeup.  Those 3 central banks (plus a few more) are defeinly Tribe slaves.  

Azannoth's picture

Yes, and they are getting exceedingly successful at implementing their Agenda, the Millennial Generation and onwards will be pure Debt-Slaves with 0 assets and 0 prospects for anything above subsistence living

johnnyarrowmaker's picture

Yes you can, us QE to give the money directly to people!  2000 euros a month should do it!

NotApplicable's picture

At some point, I'm sure this chapter of the ponzi will be explored yet again. Just need a little more conditioning first...

venturen's picture

WRONG...you can get people to spend...give them their money! But instead we give the money to criminal bankers who DUH take it and buy your stuff.

Salah's picture

Critical to have a new, disruptive "tree-trunk" technology come along, i.e. railroads, internal combustion engine, the airplane, steel-frame construction, telephone, Internet, et al.

Best bet right now: boot the UN out of American space policy, withdraw from the anti-growth, anti-capitalist Outer Space Treaty of 1967, and use "national sovereign powers" (treaty prohibits) to go back to the Moon, establish claims, protect property rights, protect IP rights (treaty prohibits)...for fun, adventure, and profit.


Lordflin's picture

Central banks have failed because money derived from debt concentrates wealth. Wage earners will always lag far behind as they are the last ones to gain us of newly printed money. There have been some to suggest that money should simply be handed out at large, assuming the purpose was to stimulate the economy rather than place all of the marbles into a few hands, but this does nothing to deal with the misallocation of capital , the lack of production as a foundation to capital, the formation of a dependent people which by necessity spirals into chaos... so while it might be an improvement over supplying the financial sector it is only chaos and destruction by another name.

zerozulu's picture

I'm ready to spend if I get some money.

pelican's picture

It does not trickle down.  The rich only need a limited number of watches, cars and homes.  The rest gets invested and creates bubbles. 

 

How is this for an idea?  Give some of the QE money to the productive members of society so it can circulate?  The middle class will buy watches, cars and homes and the economy will start moving again.

 

 

 

 

 

 

buzzsaw99's picture

central bankers do not have a beneficent bone in their little hobbit bodies. they like impoverishing the 99%, they want the 1% to have it all. to ascribe any virtue to their motives is preposterous.

venturen's picture

It is in their nature...6000 years of natural selection. Having no soul makes you short

Conax's picture

Not to mention devilish looking with a grating voice and dog breath.

Radical Marijuana's picture

Indeed, that is the most important point, buzzsaw99: the social pyramid systems of Neolithic Civilizations are thousands of years old, with the modern form of banking being merely the latest branch of those developments based on ENFORCED FRAUDS.

In my view, relatively few people take seriously enough what the first book on the Art of War stated, when it started by saying "success in war is based on deceit" and ended by saying "spies are the most important soldiers." War was organized crime on a larger scale. Thousands of years of human history has amplified that to more astronomical sizes. Therefore, we have ended up with the biggest governments being the biggest forms of organized crime, effectively controlled by the best organized gangs of criminals, the banksters.

In that context, I find Hugh-Smith's articles oscillate back and forth from being relatively better the more abstract they become, but towards being sillier the more that they focus upon particulars, as if those really mattered that much, like this article above, which presented relative nonsense about the central banks actually caring about anything that they publicly pretend to be caring about!

I recently stated my overview of that situation in a comment on this article: Chart Of The Day: This Is What 6 Years Of Central Bank Liquidity Injections Look Like

That article made this statement:

... imperative to use quotation marks every time one writes the word "market" ...

More and more, since about 2008, I have felt it was necessary to use quotation marks every time that I wrote the word "money." The word "money" gradually had its meaning inverted and perverted more and more, for about a Century in America, which was preceded by that happening for a few Centuries in the British Empire, wherein the Bank of England promoted fractional reserve banking.

Money originally meant metal coins, while "dollar" was a precise amount of silver. Those forms of real money had intrinsic value, or the "ring of truth" present in the metal itself. However, gradually, the meaning of the word "money" was inverted and perverted, so that "money" today exists as a globalized electronic fiat fraud, backed by most of the world's governments. That "money" as credit is NOT capital, but rather MAD Money As Debt is anti-capital, analogous to anti-matter, that actually annihilates capitalism, since "money" made out of nothing means that "capital" is being created out of nothing. Similarly, after "money" is legally counterfeited, as debts, then there are no more genuine markets, because the price of "money" itself has become a cruel joke, and therefore, all other "markets" also become nothing more than cruel jokes inside of that MAD Money As Debt system.

Ever since fractional reserve banking was first legalized, through the Bank of England a few Centuries ago, there has been an exponential growth of the profits from frauds being reinvested in more frauds, especially through the funding of the political processes, to legalize more and bigger frauds. THE BASIC WAYS THAT PRIVATELY CONTROLLED BANKS WERE ALLOWED TO MAKE THE PUBLIC "MONEY" SUPPLY OUT OF NOTHING DESTROYED "MARKETS" AT AN EXPONENTIALLY ACCELERATING RATE.

Of course, silver was effectively demonetized in America more than a Century ago, while the Federal Reserve Board was enacted about a Century ago, and the last connections of the original meaning of the word "money" as backed by metal, in the form of gold, was destroyed in the USA since 1971. The only thing that changed since the financial crises in 2008 was that the central banks had to up their game, to make more of the required MAD "money" out of nothing, to replace the missing "money" due to the problems that other private banks were having to continue to be able to make enough "money" out of nothing as debts, since there was no longer being enough people able and willing "borrow," by them taking out loans, which could enable those private banks to make more "money" out of nothing, while, instead, too much "money" was disappearing back to nothing, as debts were variously defaulted upon.

With respect to that overall situation, there seems to be a general trend on Zero Hedge for people to look too much at the last 6 years, with its rising role of the privately controlled central banks taking up more and more of the slack from other privately controlled banks, which could no longer keep the social pyramid schemes going, by being able to make more "money" out of nothing as debts, because there were not enough viable borrowers who were still able and willing to do that anymore. Meanwhile, the established systems also appeared desperate to find excuses whereby they can enable more potential borrowers to become viable, which was merely more nutty wrinkles in the basic MAD Money As Debt system.

During the last 6 years, the central banks stepped into the breach, because they did not have as many comparable limits regarding their abilities to make more "money" out of nothing, as the "lender" of last resort. However, people who focus up aspects of the recent wrinkling in that MAD situation tend to continue to be grossly understating the deeper nature of the real problems, and therefore, grossly underestimating what it would take to fix those real problems.

The basic MAD Money As Debt system is legalized counterfeiting of the public "money" supply by privately controlled banks, who gained that power by being able to apply the methods of organized crime to the political processes, and then leveraged that up and UP, so that they also dominated the mass media, and schools, so on and so forth, while that profound INSANITY of making "money" out of nothing by private banks was DESTROYING capitalism and markets, yet that was deliberately ignored, while its consequences automatically got worse, faster.

PRIVATE BANKS CREATING THE PUBLIC "MONEY" OUT OF NOTHING IS A FRAUD ENFORCED BY GOVERNMENTS. In that context, mostly the reactionary revolutionaries who do understand that somewhat then propose going backwards to recover some standard for more sound and honest money systems, that were backed by physical commodities, or whatever, which could not be created out of nothing. However, the deeper realities where that money was measurement backed by murder.

Money backed by gold and silver was the measurement of gold and silver backed by murder. Therefore, what actually happened, over and over again throughout history, was that the murder systems, primarily operating through the principles and methods of organized crime, were able to subvert commodity backed money. In practice, the Bank of England enabled fractional reserve banking to proliferate, and the Federal Reserve Board in the USA enabled those processes to pick up speed, until by 1971 the "solution" was to severe the last links of the value of the American dollar to physical gold. (That destruction process began long before with demonetizing silver, however, even more educated people tend to not equally emphasize that, as much as they emphasize the destruction of the gold standard backing money, despite that the original American money was bimetallic.)

The only things that actually exist are murder systems backing money systems. All other standards for money are based on idealized views regarding what money should be, that deliberately ignore what it is. The "money" system that dominates the world today is the result of the international bankers being the best organized gangsters, the banksters, that were best able to apply the methods and principles of organized crime to the political processes, in order to capture control over governments, which would then enforce the frauds of private banks making the public "money" supply out of nothing as debts.

I repeat that only thing that has changed since 2008 is the relatively increasing role of the central banks in making proportionately more of the public "money" supply out of nothing, to replace the inabilities of other privately controlled banks to be able to make enough "money" out of nothing, as debts, because those lesser banks were finding it harder to have the necessary borrowers able and willing to take out the loans made with that "money" thereby created out of nothing.

THE DEEPER ISSUE OF THE PUBLIC "MONEY" SUPPLY BEING MADE OUT OF NOTHING AS DEBTS BY PRIVATE BANKS WAS ALWAYS ENFORCED FRAUD, WHICH GOT WORSE AT AN EXPONENTIAL RATE. That system of legalized lies, backed by legalized violence, was always destroying "capitalism" and "markets" from the moment it started. Central banks can never improve any aspects of any markets, because their creation of "money" out of nothing destroys markets! It simply has gotten worse, faster, to the point where it has become so blatantly obvious that more people notice that. However, almost nobody who notices the more recent developments of those processes appears able and willing to look at the deeper causes that money is measurement backed by murder.

All private property is based on backing up claims with coercions. There is no private property outside of some system of public violence. The established political economy is built on the foundation of ENFORCED FRAUDS, because human realities were always organized lies, operating robberies. Human beings operate as entropic pumps of energy, while the ways that human civilizations developed were through the biggest bullies' bullshit social stories presenting all of those basic facts in as backwards of ways as possible.

Governments were always the biggest form of organized crime, controlled by the best organized gangs of criminals. For several Centuries those have been the biggest banksters, who were able to dominate the political processes in ways which resulted in legalizing them counterfeiting the public "money" supply out of nothing as debt. That kind of "money" was always a form of "anti-capital," which was analogous to anti-matter in the ways that kind of "money" annihilated "capitalism" and "free markets."

We already now have globalized electronic fiat money, backed by the threat of the force of atomic bombs, which is the actual reality of the ways that we now have money being measurement backed by murder. However, by and large, people tend to regard those phenomena in ways that are way too superficial, and therefore, tend to promote silly "solutions" to those problems.

The ONLY things that have changed during the last 6 years were that the ENFORCED FRAUDS continued to get exponentially worse, within which systems the central banks had to take on a bigger and bigger role in keeping those systems going. The kind of political economy we operate was always inside of the human ecology. Therefore, the debt controls were always backed by the death controls. The history of that was that the War Kings created the powers of sovereign states, which were then covertly captured by the Fraud Kings, the central banks.

Overall, progress in science and technology has enabled the continued exponential growth in the systems of lies backed by violence to become much BIGGER, more sophisticated systems of legalized lies, backed by legalized violence. All the way through those developments, the production of destruction controlled production. However, most people were brainwashed to perceive there being a false fundamental dichotomy between production versus the production of destruction. That enabled those people to develop a mistakenly idealized version of capitalism and markets.

"Money" made out of nothing as debts was inherently anti-capital, and so, the more that was done, the more that "markets" were thereby destroyed. As the central banks took over making more and more of the public "money" supply out of nothing during the last 6 years, it became more and more blatantly obvious that was destroying capitalism, and thereby generating increasingly serious and severe systemic RISKS, since the "markets" using that "money" made out nothing were being overwhelmed by the speculative gambling enabled by that kind of "money" supply.

However, the vast majority of people continue to be mainstream morons that never had a clue about any those things, and continue to mostly be so clueless that they do not have a clue how clueless they are. Furthermore, in my opinion, the few that are awakening to those facts continue to mostly be reactionary revolutionaries. I assert that we can NOT go backwards to find any genuine solutions to those problems. The only genuine solutions are to go forwards, through intellectual scientific revolutions in the philosophy of science, which may enable us to better understand how and why "money" is measurement backed by murder.

There were good reasons for governments being the biggest form of organized crime, controlled by the best organized gangs of criminals. There were good reasons for human realities to always be organized lies operating robberies. The only genuinely better resolutions to those situations require that we develop better organized crime, in the sense of better dynamic equilibria between the different systems of organized lies operating robberies.

Capitalism and free markets appear to have been destroyed by the public "money" supply being more and more made out of nothing as debts by bigger and bigger banks. However, a more scientific view of capitalism and markets should regard those as manifesting evolutionary ecologies, through general energy systems expressed as human activities. Such a more scientific view of capitalism and markets is then able to include consideration of the roles of murder and fraud, as the forms of the production of destruction that control production.

It is a dead-end stupidity to promote any return to idealized "free markets" and "capitalism" that deliberately ignore the roles of fraud and murder. The actually existing systems operate according to the ways that general energy systems operate. In the case of human beings, it means that human systems necessarily follow the principles and methods of organized crime, with the path of least resistance being the path of least morality. The fundamentals are robbery, with murder as the most extreme form of that robbery.

More scientific human beings should necessarily perceive that, to the degree that they perceive at all. As soon as human beings relatively subtract any part from the whole, and thereby give that relatively separated part a name and properties, then that SUBTRACTION has automatically and necessarily created the associated ROBBERY, in the sense that the conservation of energy now operates across the defined boundaries of the subtracted part, and taking energy across those boundaries is basically robbery by definition.

It is unavoidable and imperative for human beings that tell stories to operate through systems of organized lies and robberies, in which the murder systems are the most extreme manifestation of that. Therefore, any better analysis of the economy, within its real ecological context, always discovers systems of lies and robbery, in which money is always measurement backed by murder. Any other analysis is superficial and mistaken.

There is nothing genuinely new that is happening, other than the development of the biggest banks, as the biggest gangsters, having driven their systems of government ENFORCED FRAUDS to the point where that debt slavery has generated numbers which have become debt insanities, because there is no longer any mathematically possible way to ever resolve those from within the frame of reference of those established systems. That is why we appear to be headed towards provoking death insanities, as the only ways to respond to the established systems developing their current levels of debt insanities.

The relatively more obvious debt insanities promoted by the central banks since 2008 are merely the continued unfolding of the established systems,  developing bigger legalized lies, backed by more legalized violence. If anyone is genuinely serious about better resolutions of those problems, then they should address the deeper issues, which are how human beings tell stories, which are based upon SUBTRACTING parts from the whole, and thereafter being necessarily engaged in ROBBERIES due to that perception of reality.

As the central banks become more dominant in the role of creating the public "money" supply out of nothing, it becomes more blatantly obvious how dangerous those destructions of capitalism and free market equilibria have been. However, since those established systems appear headed towards psychotic breakdowns, I recommend much more profound paradigm shifts regarding how we perceive those processes. We are NEVER going back to the illusions regarding what was "normal."

There was never a time when "capitalism" and "markets" did not fundamentally include frauds and murders. That merely has been bubbling back to the surface more, as bigger and bigger banks were creating more and more "money" out of nothing as debts, which was annihilating the previous illusions regarding there being "capitalism" or "markets" when there were more smaller banks making the public "money" supply out of nothing as debts.

If one is serious about the ideals of capitalism and markets, along with the ideas of more honest money, then the place to start should be with respect to understanding how general energy systems manifest through human beings. However, such progress requires appreciating how and why we ended up with a philosophy of science that reversed the meaning of "entropy."

These days, we are more and more obviously living inside of Bizarro Mirror World, where everything appears proportionately backwards. Therefore, the meaning of the word "money" has been inverted and perverted, which processes went along with the inversion and perversion of "markets." However, some of the deeper aspects of that were that the concept of "entropy" was also inverted and perverted, which is why it appears almost impossible for many people to better understand how the concepts of general energy systems apply to human beings.

It is widely recognized on Zero Hedge that we are already inside a situation which is facetiously referred to as the "new normal," where the ways that we are living inside of a Bizarro Mirror World are becoming more obnoxiously absurd every day. However, in my view, there is almost no recognition of the degree to which we should go THROUGH that looking glass to find genuinely better resolutions to those situations, wherein the creation of "money" out of nothing has destroyed the previous systems of "capitalism" and "markets" which could maintain their illusions regarding themselves.

SickDollar's picture

time to send those Helicopters

101 years and counting's picture

time for fiscal stimulus?  the Fed needs a reason to print.  the government would need to increases its debt by 300-400 billion in the coming year to get treasuries the fed can buy.  ie, a helicopter drop as the money flows from the fed to UST to the peasants.

venturen's picture

the problem is they send the helicopters to Wall Street...not main street.

yogibear's picture

One solution is for society to publicly hang the bastards.

zerozulu's picture

who can argue with that.

Panic Mode's picture

If your wage is still at the pre-Lehman level, then it's a raise effectively.

NotApplicable's picture

Food is not cheaper than back then. Nor insurance, ammo, or most other items I have to buy (like auto parts). My biggest net plus from then is the fact that my wife finally quit smoking.

Ghordius's picture

to be fair... has anybody ever given those central banks the goal of pushing wages higher?

If I remember correctly, the FED has two goals: full employment and price stability. And the ECB has one goal: price stability

interestingly, price stability in the US seems to include the stock market from falling

meanwhile, price stability in the eurozone always included a certain protection of the sovereign debt market, and an aversion towards "excess volatility" (see "damn speculators")

so, no, pushing wages higher... I would not involve CBs in such a goal anyway. Isn't anyway "central planning" to ask for higher wages as a policy?

but "free money to households" is a refreshing thought. as a subsidy, it would have a limited, short effect, of course. prices would perfectly adjust, in most cases

i_call_you_my_base's picture

Those are the fed's stated goals. Their actual goal is to make sure the banking system doesn't implode. Everything else is cover.

IANAE's picture

...amazing that one of the 'stated goals' uses a metric (re)defined so as to eventually converge to 'full employment' even as labor force participation hovers at remarkably low levels... 

JR's picture

The goal of inflation is to push everything higher and it ends by the currency of the debtor nation decreasing in value; it’s not price stability; it’s monetization for the debtors and "a scheme for the hidden confiscation of wealth."

Inflation is a hidden tax on the producers – the wage earners and small merchants. And, now, the perceived value of the dollar is plunging – you can see it in the changing perception of the strength of our economy, in our political stability, in our productivity, our consumer prices, and in the benefit of the dollar being the key reserve currency of the world.

The Fed banking cartel is morally equivalent to the counterfeiter. It is engaged in fraud. Therefore, who cares about the Fed’s self-imposed “mandate”? Trust comes from sound money. That trust is now plunging and, in result, all those delayed adjustments are awaiting in the wings to hit with a vengeance.

There’s no free lunch. Somebody is pickingup the tab for those EBT cards. The rise in the U.S. cost of living, as Hugh-Smith points out, has hurt the poor and the middle class and the small businessman much more than it has hit the wealthy.

In short, inflation is prejudicial – it is designed to benefit some at the expense of others (monopoly capitalists and TBTF bankers and the entrenched Establishment). Frederic Bastiat calls it "legal plunder."

Alan Greenspan calls it confiscation. "In the absence of the gold standard, there is no way to protect savings from confiscation thrugh inflation."