That moment you really get it that the American political class is something hostile and parasitic.
The destruction of savings, which perversely is the policy intention, is a consequence of interest rate policies pursued to their Keynesian endpoint with social implications too important to overlook. Because they are not on any central bank’s radar, the misery of the loss of income for small savers is ignored along with the damage to private sector pensions and the higher insurance premiums compensating for lower investment returns. The whole thing is a deepening morass, but it seems central bankers are determined to continue with these policies nonetheless.[1]
You know we’re toast when the financial leaders all believe in free money (see below). Have none of them heard of the “free lunch” insight into human economic behavior? I gather the Turks have a saying, “Nobody loves you for your baby blue eyes.” Or, stated in up-to-date terms a la Google, Facebook, and the rest, if something is “free” to the citizen it’s likely that it’s the citizen who will be footing the bill. And we are on board with this, make no mistake. The government does the most damage with its embrace of “free money” but we take the crumbs from that and don’t insist on “real” economic policy that focuses on production. There are obvious stirrings of great unhappiness. Hence the obvious, strong, but still rather inchoate appeal of “MAGA.” Tea Party anger but more.
Inflating the quantity of money in circulation has become the most important objective for monetary policy. The other stuff about interest rates, quantitative easing and yield curve control is little more than supporting flimflam, even diverting attention from the inflation objective which reeks of confirmation bias. Confirmation bias is reinforced by the increasing dependency of the state on this form of financing. The fact it is apparently free money, justified by its alleged stimulative qualities, makes monetary inflation highly addictive. An understanding of the damage it causes is casually dismissed and along with it the painful alternative of cutting government spending to escape a downward spiral into the financial gutter. As an inflation addict, the US Government is edging closer to that gutter, now with the addition of an intensified socialistic modern monetary theory adopted by the Biden administration.[2]
The inevitable massive loss of small business and jobs that is just around the corner, on top of the sleezy, giant middle finger to American patriots in the form of Zimbabwe-scale election theft, will rip the face off of all of this. And the Democrats will, you may be certain, blame it all on “capitalism.” It’s not sure what kind of “reality” will take the stage. It won’t be anything like our current fairyland “Overton window.”
Mr. Macleod’s article is worth your time. If for no other reason that it serves up a heaping dish of what passes for normal in the world of banking, finance, investment, and government policy. That’s not a criticism of him just an observation that the “debate” among the uber technocrats is surreal, and he does a good job in describing it.
I don’t see any marker buoys laying out the passage to safety. Anywhere. And these fools lecture us about “climate change” and “Great Resets.” I can’t find the exact comment but I liked what a gent said to the effect that the political class has managed to destroy one of the most successful nations nations ever in two generations or so. Complete joke status achieved.
Fasten your seat belts. Some turbulence ahead folks. Even for the people in First Class.
Notes
[1] “Monetary Inflation: The Next Step….” By Alasdair Macleod, ZeroHedge, 2/28/21 (emphasis added).
[2] Id.
