'Without some semblance of sound money, the notion of sound investment, robust economic structure, real generational income growth, and broadly inclusive prosperity is, most regrettably, nothing more than a pipedream. Current policy and market structures ensure instability and persistent hardship.''The problem is contemporary central bank doctrine has morphed to the point that the prevailing objective is simply to sustain asset inflation. And at this point, it’s clear that QE has unleashed a dangerous mania while prolonging “Terminal Phase” excess. The current period of free “money” is financing all kinds of crazy crap, and the longer this period of egregious excess continues, the greater the impairment to the underlying economic structure. The longer this dynamic unfolds, the greater the scope of inequality, animosity and social strife.
And this gets us back to the critical issue of sound money. As a society, it is completely unrealistic to hope sustainable prosperity will somehow emerge from an extended period of Monetary Disorder. The underlying insecurity afflicting society will only continue to fester. Most will lose faith in an unfair and unjust system, with today’s Bubble excess creating enormous systemic risk. A bursting Bubble will inevitably inflict terrible hardship throughout the economy. In the meantime, runaway Monetary Inflation creates myriad risks to the fabric of society.
So, “What is the supply side strategy that we need as a country to maximize the potential growth of the United States?” Chair Powell poses the critical question, though it is hopelessly divorced from the reality of a historic monetary inflation, out of control Bubbles, market manias and resulting financial and economic dysfunction.
The policy focus at this point is little more than a desperate monetary inflation to incite higher markets and more borrowing and spending. There is no long-term strategy – how could there be? It’s ruinous inflationism. Capitalism has been crippled; the pricing mechanism sabotaged by central bankers hijacking the “cost of money.” Markets are broken, with the entire financial apparatus – from the Fed, to Wall Street, to Washington – geared toward imprudent spending and the reckless expansion of non-productive debt.
Without some semblance of sound money, the notion of sound investment, robust economic structure, real generational income growth, and broadly inclusive prosperity is, most regrettably, nothing more than a pipedream. Current policy and market structures ensure instability and persistent hardship.
Of the Trillions of fiscal spending, only a trickle finds its way toward investment in our future. Instead, most will be directed at redistribution measures – a policy approach viewed as necessary to counter systemic inequality. How crazy has this all become: Trillions of monetary stimulus stoke Bubble Dynamics and resulting inequality, while Trillions of fiscal stimulus are employed to counteract the inequities promoted by central bank activism.
Meanwhile, China has its own serious issues with monetary inflation and deep structural impairment. Aggregate Financing, China’s broad measure of system Credit, expanded $803 billion (second only to March 2020’s $805bn) during January, about 2% ahead of the previous record from January 2020. One-year growth of $5.432 TN was 35% ahead of the previous year’s growth and 46% above one-year growth from two years ago. Aggregate Financing expanded 13.0% over the past year to $45 TN. Aggregate Financing has expanded 57% since the PBOC began reporting this iteration of Credit data four years ago.'
- Doug Noland,
The Short but Momentous History of Fed QE, February 12, 2021
Context (Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..''The only cure for a Bubble is to not let it inflate.' - Dr. Kurt Richebacher2021: The Year of Acute Monetary Disorder and Fragility'We’re today in the most financially unstable environment of my over 30 years of analysis.''The GDP measure fails to register this loss of wealth .. When debt capital, like any other factor of production, is overused its marginal revenue product declines.''..There are days when the Japanese government bond markets literally have no trades. This is truly a world gone mad .. the entire global economy is basically one giant price control.' -
Controlling the Curve, February 5, 2021
A Beacon of Light to Warn and Guide, February 12, 2021
Inflation Obsession – When? February 5, 2021
A Shift to Value, January 29, 2021