or, The Golden trickle….
or, did that come out of Jackson Hole?
Well, whether Mr Bernanke did actually say it, or not, or maybe, the dear markets have been appeased again, the shit for shit deals are on, by gawd, by hook or by crook, we’re going to (try to) re-capitalise these banks, Draghi will of course mouth likewise. If rumours are anywhere approaching true, there may be a Bank that will soon need a shot, through the backdoor one would presume. But speculators take heart….one more shake of the cat.
Of course, the money will obviously fail to escape the event horizon of the financial black hole, nor the sticky fingers that it has to pass through. Ben and his ruffians are working at the wrong end of the debt problem. As Professor Steve Keen eloquently explains, this approach combined with austrerity is a misplacement of liquidity, debts need to be written off and the focus needs to be on the massive amounts of private debt. Public debt is of much less concern than private debt, which greatly outstretches it as a percentage of GDP. The servicing of the private debt load impacts consumption, which makes up c.70% of GDP… Keen is proposing a debt jubillee where the government would pay everyone a sum of money to retire their debt, or if debt free, spend into the economy. There are inflatonary issues there that need resolution and at the same time the debt deflation forces a deleveraging of the banks and probably some collapses (that’s where you’ve gotta get all Austrian and let them go.)
Prof Keen’s model applies particularly to the economies of the USA and Australia, but have an obvious global resonance. He was, by the way, one of the 12 economists identified by Dirk Bezemer who predicted the GFC and is much celebrated for his explanations and extensions of Hyman Minsky.
But nah, they’re not going to do that. A quick pump and dump before Armageddon?
A private island.