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Mapping The Crisis Contagion Process: The Flowchart

Tyler Durden's picture




 

When one looks across markets and reflects on the actions of the world’s central banks since 2008, it’s easy to get confused. 

That is, how could it possibly have come to this?

In polite circles and certainly in the mainstream media echo chamber, Ben Bernanke’s deployment of unconventional monetary policy in the wake of the crisis is credited with pulling the world back from the edge of a veritable financial apocalypse and if that’s true, then the proliferation of these world-saving monetary measures should by all rights have brought about a dramatic global economic recovery. 

Only that didn’t happen.

Instead, we stand once again at the precipice of crisis and central banks are out of ammunition and, perhaps more importantly, completely out of credibility. Indeed, the fact that we are facing a new Asian Financial Crisis, emerging market mayhem, harrowing bouts of volatility accompanied by ever more frequent flash crashes across asset classes seems to prove that far from "smoothing out" the business cycle, Keynesianism gone wild in fact does the exact opposite: it creates the conditions for still greater booms and busts and thereby serves to destabilize markets. 

In light of the above, we present the following flowchart from BNP which should serve as a helpful roadmap for those wondering how we just went from one major crisis to another in the space of seven years and all we have to show for it is more debt and trillions in printing press money that did next to nothing to boost aggregate demand. 

 

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Thu, 09/03/2015 - 12:47 | 6504845 JustObserving
JustObserving's picture

US leads the world in too much debt - $1,720,000 per taxpayer compared to $65,000 per taxpayer for bankrupt Greece.  We may be getting dumber but at least we lead the world by a long shot in that category

Forward

Economist Tells Congress: U.S. May Be in ‘Worse Fiscal Shape’ Than Greece

“The first point I want to get across is that our nation is broke,” Kotlikoff testified. “Our nation’s broke, and it’s not broke in 75 years or 50 years or 25 years or 10 years. It’s broke today.

http://cnsnews.com/news/article/barbara-hollingsworth/economist-tells-co...

Thu, 09/03/2015 - 12:47 | 6504890 KnuckleDragger-X
KnuckleDragger-X's picture

Yep, but its magic debt and subject to even more magic money. The problem with the above chart is that it makes no accounting for chaotic events since they can't be predicted, but they will likely be the driver of the collapse.....

Thu, 09/03/2015 - 12:54 | 6504944 junction
junction's picture

So, instead of saying the truth, that looters have taken over the world economy, someone calls the situation "crisis contagion."  Who are the disease vectors that are the carriers of this pathogen causing the crisis?  Mostly Goldman Sachs banksters like Mario Draghi and Henry Paulson.  Banksters and their cohorts like Obama and Eric Holder and David Cameron who have poisoned the world economy.  What we need are fewer weasel words like crisis contagion and more words like "You are under arrest, Eric Holder, for criminal conspiracy."  

Thu, 09/03/2015 - 12:39 | 6504847 Turdy Brown
Turdy Brown's picture

Weak article!

Thu, 09/03/2015 - 12:42 | 6504858 Big Beta Bill
Big Beta Bill's picture

Bernanke hasn't written a blog post in a while.  Where is he? 

Thu, 09/03/2015 - 12:49 | 6504909 KnuckleDragger-X
KnuckleDragger-X's picture

Servicing his harem of cockroach's......

Thu, 09/03/2015 - 12:49 | 6504907 RawPawg
RawPawg's picture

maps

flow charts

 

perferred gauge of how this is all gonna end

Thu, 09/03/2015 - 12:50 | 6504918 khnum
khnum's picture

i think were about at the stage now where we need Jackson Pollock to do world economy charts

Thu, 09/03/2015 - 12:52 | 6504927 Consuelo
Consuelo's picture

 

- They have ~plenty~ of 'ammunition'...

- If they were out of 'credibility' where it mattered anyway, a market-clearing event would have gotten underway a long time ago.

 

When a light goes on above the average $100k/year salaried employee at Twatter, that something is amiss and begins purchasing necessities as prices begin to rise on a daily basis, then perhaps credibility will have been lost.

 

Thu, 09/03/2015 - 12:58 | 6504960 I am a Man I am...
I am a Man I am Forty's picture

"financial repression" - no comprende

Thu, 09/03/2015 - 13:44 | 6505204 DOGGONE
DOGGONE's picture

THE MUCH BIGGER LIE IS

Inflation-adjusted stock prices are rarely shown:
http://www.showrealhist.com/begun.gif
http://www.showrealhist.com/
http://www.showrealhist.com/recDJIAtoRD.html

Will this deception by omission end?

Thu, 09/03/2015 - 16:01 | 6505969 Pipetex
Pipetex's picture

Told you about religion... all what's left is "credibility" and a turbocharged Heidelberg printing press!

Do you really think this deflationary process will last for years? bet you it won't.

In Venezuela, there are 297Bbl of reserves for 30Mln people... some 10000B or us$500.000 for every man, woman and kid even at this low prices... they could easily afford a socialist state if not in the middle of an economic war. Think about it while making plans on how to get out from the coming collapse as a functioning society... No matter how low appreciation for a socialist state are trendy this days, the construction of a "safety net" that gives cohesion to a society is not in the hands of capitalism to make.

 

 

Meanwhile...

https://www.youtube.com/watch?v=5NNOrp_83RU

 

 

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