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Business/Finance See other Business/Finance Articles Title: Anarchy From Above G.K. Chesterton once warned about “anarchy from above”... Think of anarchy and its mobs and Molotov cocktails. But as Chesterton wrote, “it isn’t necessary that anarchy should be violent; nor is it necessary that it should come from below.” And the golden nugget: “A government may grow anarchic as much as a people.” Desperation is the natural breeding ground of anarchy. And governments are sweating lead over the fading global economy. Their central banks have already shelled it with $60 trillion worth of debt since 2009. Only under such a furious barrage of debt can the economy possibly recover, the theory being. And now the world’s debt load, public and private, weighs in mountain-high at $200 trillion — almost three times the size of the global economy. Economist James Dale Davidson crunched the numbers. Assume the interest on this $200 trillion is 2 %, he says. That means the economy would have to grow by 6% — 300% of GDP — to simply cover the interest charge on the outstanding debt. And that, according to Davidson, implies a $500 billion annual deficit. There’s a word describing an economy growing at less than half the rate to meet its debt load: unsustainable. Now that the central banks have emptied the magazines to fight the Great Recession, there’s no powder to battle the next one. And they’re finally beginning to admit it… Federal Reserve economist David Reifschneider has written a real rip-roarer called Gauging the Ability of the FOMC to Respond to Future Recessions. Sample quote: “In setting this path for policy, the FOMC is assumed to follow the prescriptions of a simple rule, RRtt = RR* tt + 0.5( tt - *) - 2.0(UUtt - UU*), subject to the ELB constraint.” Subject to the ELB constraint. Of course. But here’s the key part in something approaching English: In the event of a fairly severe recession, asset purchases and forward guidance should be able to compensate for the FOMC’s likely limited scope to cut short-term interest rates in the future. That said, this analysis also suggests that there could be situations in which this might not be possible… one cannot rule out the possibility that there could be circumstances in the future in which the ability of the FOMC to provide the desired degree of accommodation using these tools would be strained. Ambrose Evans-Pritchard of The Telegraph with the full translation: The Federal Open Market Committee had to cut interest rates by an average of 550 basis points over the last nine recessions in order to break the fall and stabilize the economy. It could not possibly do so right now, or next year, or the year after. Quantitative easing (QE) in its current form cannot compensate, and nor can forward guidance. They are largely exhausted in any case. So now what? Admit it’s all failed and leave it to the free market to hash out next time? Never. Power never relinquishes power. The answer is to shove it into fewer hands. So it’s madder music, stronger wine, wilder dreams… more anarchy from above. Power never relinquishes power. The answer is to shove it into fewer hands. Evans-Pritchard says “A new orthodoxy is emerging in elite global circles” calling for “concerted fiscal stimulus on a world scale.” En Anglais: Helicopter money… on a global scale… built upon moonshine economics right out of the ‘30s. (He must be reading Jim Rickards). Then there’s the mad descent into negative interest rates and the abolition of cash elites are drumming for… A grandee called Narayana Kocherlakota captained the Federal Reserve Bank of Minneapolis from 2009–2015. He says if you want a “free market,” then you must “abolish cash”: The right answer is to abolish currency and move completely to electronic cash… Because electronic cash can have any yield, interest rates would be able go as far into negative territory as the market required. As far as the market required? Or as far as the government required? And is it the “free market” that meets every few months to determine interest rates? Or is it a group of twelve government-appointed apparatchiks like the good Dr. Kocherlakota? Ken Rogoff, Harvard professor and former chief economist of the IMF, is another sultan of the monetary establishment. Not only does he demand the abolition of all bills larger than $10 (sorry, Harriet Tubman). He dreams of a day when every citizen would have their own personal bank account... with the Fed! Servant, meet master... In the words of London-based wealth manager Tim Price, “Our entire central bank controlled financial system is based on the premise that unelected, unaccountable bureaucrats should be able to direct individuals’ consumption and production behavior from ivory tower conclaves.” Anarchy from above. “The modern world is insane,” said Chesterton, reflecting on anarchy from above, “not so much because it admits the abnormal... as because it cannot recover the normal.” If Kocherlakota and Rogoff and “Helicopter” Ben Bernanke and the IMF and all the rest of the economic crazies have their say… it never will. Below, Jim Rickards rips the mask off the latest scheme to “get rid of things standing in the way” of the Fed’s madcap interest rate policies. Like your cash? How about your gold? Read on. Regards, Brian Maher Managing editor, The Daily Reckoning Editor’s note: The world will take another major step down the monetary rabbit hole three weeks from today. It goes down on Sept. 30. Jim Rickards calls it “D-Day” for the dollar. He says the U.S. dollar could nosedive... leading to a massive implosion for U.S. stocks. And the carnage could start right away. He says what’s coming will go down around 4 pm. What’s going to get it all started on Sept. 30? And how can you prepare yourself for the hurricane that follows? Click here now to find out. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
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I knew an Airborne soldier once. He had a shoulder patch that read "Death from Above". ;)
"When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke
This is right on end times tracking with Scriptures.
Experts keep talking about a coming economic collapse or hyperinflation but it never happens. I am beginning to think it never will.
"When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke
Right, and a broken arm will only heal if you keep bashing it with a baseball bat. " As a citizen, I would hesitate to see any political party outlawed on the basis of its political ideology. However, if it is proven that an organization is an agent of foreign power, or in any way not a legitimate political party -- and I think the government is capable of proving that -- then that is another matter." - Ronald Reagan to House Un-American Activities Committee, October 23, 1947
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