The Stygian Witches and The Boiling Frog's
On David Stockman's, China's Monumental Debt Trap, DavidDLMO commented: "The Central Bankers must have got together and agreed cause most all now try to create 2 % inflation. I think Bernanke was spooked of deflation."
We Nattered... "2% is the CB's advertised number of media narrative. Expectation management and the FED statement as such was covered in our missive Disinguenue in the the Land of Oz, Part 3.
The media narrative promulgates "the FED's objectives in conducting monetary policy. "Communicating this inflation goal clearly helps keep longer-term inflation expectations firmly anchored."
The Nattering One muses... "Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency. . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose." - Keynes
To debauch the currency requires inflation. So, pay no heed to the man behind the curtain, the pot starts luke warm, and the Frog's are happily basking in it.... In the end, you will know, just because a central bank communicates 2% as an inflation target, does not mean 2% is the target, nor does it mean that 2% is what the rate of inflation really is. This is only illusory sleight of hand to keep your expectations, firmly anchored, right where the house of finance wants it.
As the Graeae were the sisters of the Gorgon, the central bankers are the sisters of the house of finance. One must be cognizant that inflation is the bane of the house of finance and a debt based system. At the same time, the antithesis of inflationary debt based systems and the house of finance's worst enemy is: true deflation. Therefore the "anchor of expectations", intended for consumption by a gullible public, must forever be detached from the real world, as inflation is always much higher than advertised.
Deflation is defined as when the general level of asset and consumer prices falls, making its use a relative term. For this example, the definition of true deflation is: an assets market price falls below its original pre debt cycle purchase price. Since inflation is always much higher than advertised, true deflation can only occur on debt or assets sold (read issued at hyperinflated prices) closer to the end or crisis phase of the debt run up cycle. Depending who the buyers are and the timing of their purchases, pre-crisis debentures, equities and asset classes (real estate) are sold during the run up with the intent to later be either liquidated or rolled up and refinanced (bail out).
Stepping back and taking a broader view in scope and scale of past crises reveals that under the house of finances inflation and debt system, in general, true deflation does not occur, and is not tolerated under any circumstance. In general, an asset purchased prior to the "current" debt cycle run up, will not revert to a price level below its original pre cycle purchase price. Therefore, if deflation is advertised, in relative terms, this is disinformation for disingenue and only means the CB's need to stoke the inflation level even higher to roll the pot of debt to a new boil.
Media narrative is laced with the falsity of the CPI (and other econometrics) to create disinformation which is intended EXACTLY as this FED statement reads... "to keep inflation expectations firmly anchored". Hence the falsity of CB econometrics (CPI, GDP, BLS, et al) tied to a media narrative of a fabled economic recovery, where none ever occurred. More on the falsity of econometrics later.
This detachment from reality by the CB's and the media narrative is exactly that and would make Goebbel's proud. If you tell a big enough lie, enough times, people will eventually believe it to be truth. Yes, "the economy is taking off and we must raise rates to contain it." Translated into Stygian, the economy is prostate on the table and unlike Lazarus, cannot be brought back from the dead.
This time the CB's have hit bottom with ZIRP and negative real rates. As cutting further (sub zero) is out of the question, they will resurrect Lazarus, as they see fit, in order to raise rates for more inflation and debt, and repeat the cycle. And in doing so, the CB's know full well they cannot possibly kill an economy (by raising rates) which is already quite dead and at best, a zombie.
As debauching (robbing the public blind while it sleeps) is their forte, at the beginning of a cycle, the CB's engage in a race to the bottom. To give a non dollar example: In 1959, the French Franc was worth 2.5% of its 1934 value (97.5% debauch over 25 years). In 1960, the NEW French Franc was introduced and the old Franc was revalued at 100 old francs per new franc (100% debauch, in one day). The old one and two franc pieces were allowed to circulate as centimes. When the euro replaced the NEW franc on 1 January 1999, the NEW franc had become worth less than an eighth of its original 1960 value (87.5% debauch, over 40 years). Just as a 1910 US Dollar is now worth $25; or a 2015 US Dollar is worth 4 centimes of a 1910 dollar (96% debauch, over 105 years). Think about the scope of debauchery involved over the scale of years (generations) and frogs in the pot come to mind.
The pot started luke warm, and by slightly raising the temperature over time, the comfortable bath becomes a seething cauldron in which the once happily basking frogs known as John Q Public are slowly boiled to death in the house of finances stygian brew of ever increasing debauchery (inflation), debt, defaults, deleveraging and crisis management bailouts. One after another, these crises are manufactured in an escalating fashion (shock and awe) and the growing private debts become monetized (through bailouts) onto the backs of an unsuspecting, satiated and apathetic John Q. Public. Ma! Froggy does as froggy wants, see, Ma!
Regarding the falsity of CB econometrics, CB's can and do "cook up" their own econometrics and regardless of accuracy or truthfulness, can act upon those "house sponsored" metrics, as they and their sponsors see fit. Based upon history, only the gullible, trusting, naive, foolish or programmed (brainwashed) does not come to this conclusion. Why?
Wake up Baby Ducks... remember Keynes as quoted above and what the CB's history of debauchery has taught us? Further, despite what you have been told, may think or believe... there exists no enforceable legal codification which states that any central bank must tell the truth or act upon it accordingly in the public interest. When you locate such enforceable legal code, please do send it our way.
If John Q. Public ever wakes up to this, as the hero Perseus did, he might steal the Stygian witches collective eye while they were passing it amongst themselves, and then force them for once and all, to tell the truth and act upon it appropriately, as in the public interest, not the house of finances. We already know not to hold our breath on that eternity of debauchery.
We Nattered... "2% is the CB's advertised number of media narrative. Expectation management and the FED statement as such was covered in our missive Disinguenue in the the Land of Oz, Part 3.
The media narrative promulgates "the FED's objectives in conducting monetary policy. "Communicating this inflation goal clearly helps keep longer-term inflation expectations firmly anchored."
The Nattering One muses... "Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency. . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose." - Keynes
To debauch the currency requires inflation. So, pay no heed to the man behind the curtain, the pot starts luke warm, and the Frog's are happily basking in it.... In the end, you will know, just because a central bank communicates 2% as an inflation target, does not mean 2% is the target, nor does it mean that 2% is what the rate of inflation really is. This is only illusory sleight of hand to keep your expectations, firmly anchored, right where the house of finance wants it.
As the Graeae were the sisters of the Gorgon, the central bankers are the sisters of the house of finance. One must be cognizant that inflation is the bane of the house of finance and a debt based system. At the same time, the antithesis of inflationary debt based systems and the house of finance's worst enemy is: true deflation. Therefore the "anchor of expectations", intended for consumption by a gullible public, must forever be detached from the real world, as inflation is always much higher than advertised.
Deflation is defined as when the general level of asset and consumer prices falls, making its use a relative term. For this example, the definition of true deflation is: an assets market price falls below its original pre debt cycle purchase price. Since inflation is always much higher than advertised, true deflation can only occur on debt or assets sold (read issued at hyperinflated prices) closer to the end or crisis phase of the debt run up cycle. Depending who the buyers are and the timing of their purchases, pre-crisis debentures, equities and asset classes (real estate) are sold during the run up with the intent to later be either liquidated or rolled up and refinanced (bail out).
Stepping back and taking a broader view in scope and scale of past crises reveals that under the house of finances inflation and debt system, in general, true deflation does not occur, and is not tolerated under any circumstance. In general, an asset purchased prior to the "current" debt cycle run up, will not revert to a price level below its original pre cycle purchase price. Therefore, if deflation is advertised, in relative terms, this is disinformation for disingenue and only means the CB's need to stoke the inflation level even higher to roll the pot of debt to a new boil.
Media narrative is laced with the falsity of the CPI (and other econometrics) to create disinformation which is intended EXACTLY as this FED statement reads... "to keep inflation expectations firmly anchored". Hence the falsity of CB econometrics (CPI, GDP, BLS, et al) tied to a media narrative of a fabled economic recovery, where none ever occurred. More on the falsity of econometrics later.
This detachment from reality by the CB's and the media narrative is exactly that and would make Goebbel's proud. If you tell a big enough lie, enough times, people will eventually believe it to be truth. Yes, "the economy is taking off and we must raise rates to contain it." Translated into Stygian, the economy is prostate on the table and unlike Lazarus, cannot be brought back from the dead.
This time the CB's have hit bottom with ZIRP and negative real rates. As cutting further (sub zero) is out of the question, they will resurrect Lazarus, as they see fit, in order to raise rates for more inflation and debt, and repeat the cycle. And in doing so, the CB's know full well they cannot possibly kill an economy (by raising rates) which is already quite dead and at best, a zombie.
As debauching (robbing the public blind while it sleeps) is their forte, at the beginning of a cycle, the CB's engage in a race to the bottom. To give a non dollar example: In 1959, the French Franc was worth 2.5% of its 1934 value (97.5% debauch over 25 years). In 1960, the NEW French Franc was introduced and the old Franc was revalued at 100 old francs per new franc (100% debauch, in one day). The old one and two franc pieces were allowed to circulate as centimes. When the euro replaced the NEW franc on 1 January 1999, the NEW franc had become worth less than an eighth of its original 1960 value (87.5% debauch, over 40 years). Just as a 1910 US Dollar is now worth $25; or a 2015 US Dollar is worth 4 centimes of a 1910 dollar (96% debauch, over 105 years). Think about the scope of debauchery involved over the scale of years (generations) and frogs in the pot come to mind.
The pot started luke warm, and by slightly raising the temperature over time, the comfortable bath becomes a seething cauldron in which the once happily basking frogs known as John Q Public are slowly boiled to death in the house of finances stygian brew of ever increasing debauchery (inflation), debt, defaults, deleveraging and crisis management bailouts. One after another, these crises are manufactured in an escalating fashion (shock and awe) and the growing private debts become monetized (through bailouts) onto the backs of an unsuspecting, satiated and apathetic John Q. Public. Ma! Froggy does as froggy wants, see, Ma!
Regarding the falsity of CB econometrics, CB's can and do "cook up" their own econometrics and regardless of accuracy or truthfulness, can act upon those "house sponsored" metrics, as they and their sponsors see fit. Based upon history, only the gullible, trusting, naive, foolish or programmed (brainwashed) does not come to this conclusion. Why?
Wake up Baby Ducks... remember Keynes as quoted above and what the CB's history of debauchery has taught us? Further, despite what you have been told, may think or believe... there exists no enforceable legal codification which states that any central bank must tell the truth or act upon it accordingly in the public interest. When you locate such enforceable legal code, please do send it our way.
If John Q. Public ever wakes up to this, as the hero Perseus did, he might steal the Stygian witches collective eye while they were passing it amongst themselves, and then force them for once and all, to tell the truth and act upon it appropriately, as in the public interest, not the house of finances. We already know not to hold our breath on that eternity of debauchery.
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