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| y SWRichmond
on Wed, 02/03/2010 - 16:42
#216414
I found this a very interesting read and thought I would put it out there to get your opinions????
If the crisis is structural vs cyclical....interesting way to frame the problem. So many who are alive today and actively participating in these markets have spent their entire adult lives in the Greenspan credit bubble (20+ years), juiced by falling interest rates; they learned behaviour, acquired habits and are burdened with expectations that are no longer appropriate.
What we have to do is completely change the way we think about money. Namely, there is no g--dammed money. The regime of falling interest rates is at an end, and that is the reason why this crisis is structural rather than cyclic. Any cyclic slowdown we had was immediately bubbled away by Greenspan. Now that interest rates are at zero, we are using QE to render effective rates less than zero. The things we thought we could afford we never really could afford, but thought we could because of easy money.
This is the essence of central banking and the welfare/warfare state. Bubblenomics makes us feel like we can afford war and medicare/medicaid/social security/SSI/extended and emergency unemployment benefits/socialized medicine/corporate welfare/bailouts/what have you. Now that the regime of steadily falling interest rates is ended, we see that we could never afford any of that crap at all, and we stagger about trying to figure out how to balance a budget that is based on a false assumption. The fact is, we never had the money in the first place. There is no g--dammed money. We're broke. There is no more demand we can pull forward, there is no one to whom we can export our way to happiness, or salvation, or fiscal balance; there is no one who has enough money to lend us to tide us over until the magical productivity fairy shows up.
It's not real. It never was. | |
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Money..Bubblenomics
