The Five D's - Part I
Of course, the bankers first order of business is inflation at all costs (of which public expectations must always be anchored, hence grossly underestimated inflation statistics). Deflation is the bankers enemy and when things are not going well for the bankers, it must be advertised as imminent to the chumps, to gain "approval" for more mass inflation.
More debt? Absolutely, inflation and debt are the lifeblood of the "house of finance" and the bane of their existence. Their motto is, money for nothing and anything for cash flow, at your expense and regardless of the long term consequence. New loans are issued to roll up the old loans and cover up the defaults and bad paper (crap collateral) in the ponzi scheme.
1. Capital, whether in the form of a debt or an equity stake, will flow to where it can be expected to generate the highest return on a risk-adjusted basis. If it generates no return, there would be no reason to invest. Capital will instead be used to buy back common stock, for example, in companies engaged in productive activities.
2. Without investment, there would be no growth and economic activity would decline. This would result in lower standards of living. Printing money would simply lead to inflation, causing standards of living to fall further, eventually leading to capital flight, political upheaval, and internal / external conflicts.
Items 1 and 2 partially explain the "secular stagnation" of media narrative which is really a perversion of capital. With all the "financial engineering" or money shuffling going on in debt and "cash flow" derived from derivative instruments, we no longer have tangible end product and this lack of a durable economic base to absorb the shock of the asset bubbles collapsing, will ultimately be the undoing.
Policy makers should beware that Keynes "theories" are slightly dated. As for flight to "quality", that is a relevant term and at the moment, we are the lesser of all evils. Due to dollar hegemony, we catch cold, they get the flu. We currently have the flu, they have Ebola.
After bailing out the financial sector, instead of allowing hedge funds like Blackstone to purchase large blocks of foreclosed homes for pennies on the dollar, which they have turned into rentals. A Section 8 3/2/2 SFR gets $2400 a month in LA County, explaining why $500K crap shacks have have day track hookers walking in front of them. Thus creating false demand by limiting supply, and artificially propping up housing prices, those homes should have been auctioned to non investor members of the public who provided the bailout. More to come in Part II.
More debt? Absolutely, inflation and debt are the lifeblood of the "house of finance" and the bane of their existence. Their motto is, money for nothing and anything for cash flow, at your expense and regardless of the long term consequence. New loans are issued to roll up the old loans and cover up the defaults and bad paper (crap collateral) in the ponzi scheme.
1. Capital, whether in the form of a debt or an equity stake, will flow to where it can be expected to generate the highest return on a risk-adjusted basis. If it generates no return, there would be no reason to invest. Capital will instead be used to buy back common stock, for example, in companies engaged in productive activities.
2. Without investment, there would be no growth and economic activity would decline. This would result in lower standards of living. Printing money would simply lead to inflation, causing standards of living to fall further, eventually leading to capital flight, political upheaval, and internal / external conflicts.
Items 1 and 2 partially explain the "secular stagnation" of media narrative which is really a perversion of capital. With all the "financial engineering" or money shuffling going on in debt and "cash flow" derived from derivative instruments, we no longer have tangible end product and this lack of a durable economic base to absorb the shock of the asset bubbles collapsing, will ultimately be the undoing.
Policy makers should beware that Keynes "theories" are slightly dated. As for flight to "quality", that is a relevant term and at the moment, we are the lesser of all evils. Due to dollar hegemony, we catch cold, they get the flu. We currently have the flu, they have Ebola.
After bailing out the financial sector, instead of allowing hedge funds like Blackstone to purchase large blocks of foreclosed homes for pennies on the dollar, which they have turned into rentals. A Section 8 3/2/2 SFR gets $2400 a month in LA County, explaining why $500K crap shacks have have day track hookers walking in front of them. Thus creating false demand by limiting supply, and artificially propping up housing prices, those homes should have been auctioned to non investor members of the public who provided the bailout. More to come in Part II.
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