(Banking Reform) - 'The Fed blew three economic bubbles in succession. A deflationary bust has started.'

'..I am blaming the Fed for its erroneous inflationary tactics that blew three of the biggest economic bubble in succession: 2000, 2007, 2020.

Bubbles are inherently deflationary.

It’s asset asset bubble deflation that is damaging, not routine price deflation.

When asset bubbles burst, debt deflation results.

Here we go again.'

'The Fed blew three economic bubbles in succession. A deflationary bust has started.

..

My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.

BIS Deflation Study

The BIS did a historical study and found routine deflation was not any problem at all.

“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study.

Deflationary Outcome

The existing bubbles ensure another deflationary outcome.

So prepare for another round of debt deflation, possibly accompanied by a lower CPI especially if one accurately includes home prices instead of rents in the CPI calculation.

Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse

..

Worth Repeating

Deflation is not really about prices. It's about the value of debt on the books of banks that cannot be paid back by zombie corporations and individuals.

That is what the Fed fears. It takes lower and lower yields to prevent a debt crash. But it is entirely counterproductive and it does not help the consumer, only the asset holders. Fed (global central bank) policy is to blame.

These are the important point all the inflationistas miss.

..

..I am blaming the Fed for its erroneous inflationary tactics that blew three of the biggest economic bubble in succession: 2000, 2007, 2020.

Bubbles are inherently deflationary.

It’s asset asset bubble deflation that is damaging, not routine price deflation.

When asset bubbles burst, debt deflation results.

Here we go again.'

- Mike "Mish" Shedlock, Very Deflationary Outcome Has Begun: Blame the Fed, March 5, 2020



Context (Banking Reform) - '..For Saravia de la Calle, those who engage in fractional reserve banking commit a mortal sin..'

'..BIS chastises central banks .. More fundamentally, monetary policy cannot be the engine of growth.'

'In 1965, CEOs in the US earned 20 times more than the average worker but by 2015 it had risen to 300 times..'

'Few understand the deflationary impacts of the entire gamut of trends that is playing out..' - Mike Shedlock


'..here we are in 2020 with Bubbles everywhere..'

(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'

Affective Introspection