The QEP or FED Fallacy
DDLA - "There is no real alternative to QEP. Neither you nor any other critic of QEP has an alternative monetary policy.... In 2009 thousands of business became bankrupt (and of course millions of people). If you theory is correct, this should have cleansed the US economy of billions of dollars of bad credit and bad businesses. Vast amounts of capital and resources should have been freed up for new growth. Yet none of that has happened. Destruction of capital is bad for business."
The Nattering One muses... The conclusion above is a red herring based on a false premise which attempts to associate my theory (the banksters should have been allowed to fail) with that premise, and its unlogical conclusion that "nothing could be better than what the Fed has done" or that there is no alternative to QEP.
Imagine if you will, a world in which... Failed banks which without bookkeeping sleight of hand and the largess of the central bank, in putting them on corporate welfare, on the public's dime, living off of excess reserves (in the form of UST's being remunerated via IOER) and are still legally bankrupt to this day.
Instead of a merciful and swift death, which they should have had in a truly free market, and due to their masters along with public enemy #1 (ABA) influence, these financial institutions survive despite what the market had intended.
As a part of that effort, Central banks have been buying up half their own bond issuance, resulting in false demand, false pricing, false rates. A free market is the final arbiter, this market and its asset prices is false and contrived, making true price and interest rate discovery impossible.
Like a tumor without proper debulking, this financialized cancer has been allowed to metastasize. Resulting in an enfeebled zombie like existence for these failed institutions in which to suck up valuable resources that should have and still could go to better economic causes, compounding the initial failures and creating further economic malaise.
By looking at JPS's OECD graph above, one can easily tell that said economic malaise has resulted in the destruction of est. $60T in capital. As JPS aptly states: "an entirely new class of negligence, gross misconduct that is costing the world lost economy beyond all comprehension."
The facts are, those businesses who failed were impaled out. Those who should have been allowed to fail, the ones who caused all the problems in the first place, the house of finance, were bailed out in grand fashion by their acolytes. And there is something in this more than natural....
Due to those bail outs, not letting nature take its course, and completely perverting the markets and system in the process with intervention after intervention, QE, ZIRP, NIRP, vast amounts of capital were not freed up, they were sequestered, and subsequently $60T in potential capital was destroyed.
At the end of the day, on one point I agree, destruction of capital is bad for business. That's why the global economy is sucking wind and on the verge of asphyxiation. We also have no need to "imagine" such a world, as we are living it's consequences.
So yes as DDLA stated, "but none of this has happened". How could it? Freeing up of capital and the natural life death cycle can only occur in a free market.
With all the "heroic" CB interventions, this market is anything but. And that is the false premise upon which the construct of "nothing could be better than what the Fed has done" is based.
The rabid insistence that there is nothing else nor better, than the heinous crimes which have been committed, many involved should be rotting in prison, and that these seemingly innocent and bumbling central bankers...
who faithfully do their masters bidding, are somehow innocent heroes, who had NO other choices, leaves those who believe "nothing could be better than what the Fed has done" to only contemplate a universe where the bail outs, QE, ZIRP and NIRP were and are the only possibility. And a miserably failed one at that.
In summation, this comical MSM parroting construct is based on a false premise that something else would have been better and should have and could have been done. Which anyone not practicing "conscious ignorance" in a bubble like existence, and with a lick of common sense would tell you, most definitely could and should have.
In addition, this MSM myopia conveniently ignores and discounts the deleterious effects that such perversions of nature (there is something unnatural in this) have on markets and economies, such as zombification.
That is witnessed by those acolytes or proponents of said fallacies inability to comprehend how central banks have artificially suppressed rates through monopolizing the bond market float. Or how Trillions in capital has been sequestered and destroyed.
Or how if this situation is not rectified in much shorter order than most think, what happened with the recent implosion in the JPG 10 yr yield or civic explosion in Turkey, is just the tip of the iceberg.
Sorry that these "nothing could be better than what the Fed has done" acolytes seem to be trapped in a "Fed speak" world, but not sorry to burst their bubble, pun intended.
The Nattering One muses... The conclusion above is a red herring based on a false premise which attempts to associate my theory (the banksters should have been allowed to fail) with that premise, and its unlogical conclusion that "nothing could be better than what the Fed has done" or that there is no alternative to QEP.
Imagine if you will, a world in which... Failed banks which without bookkeeping sleight of hand and the largess of the central bank, in putting them on corporate welfare, on the public's dime, living off of excess reserves (in the form of UST's being remunerated via IOER) and are still legally bankrupt to this day.
Instead of a merciful and swift death, which they should have had in a truly free market, and due to their masters along with public enemy #1 (ABA) influence, these financial institutions survive despite what the market had intended.
As a part of that effort, Central banks have been buying up half their own bond issuance, resulting in false demand, false pricing, false rates. A free market is the final arbiter, this market and its asset prices is false and contrived, making true price and interest rate discovery impossible.
Like a tumor without proper debulking, this financialized cancer has been allowed to metastasize. Resulting in an enfeebled zombie like existence for these failed institutions in which to suck up valuable resources that should have and still could go to better economic causes, compounding the initial failures and creating further economic malaise.
By looking at JPS's OECD graph above, one can easily tell that said economic malaise has resulted in the destruction of est. $60T in capital. As JPS aptly states: "an entirely new class of negligence, gross misconduct that is costing the world lost economy beyond all comprehension."
The facts are, those businesses who failed were impaled out. Those who should have been allowed to fail, the ones who caused all the problems in the first place, the house of finance, were bailed out in grand fashion by their acolytes. And there is something in this more than natural....
Due to those bail outs, not letting nature take its course, and completely perverting the markets and system in the process with intervention after intervention, QE, ZIRP, NIRP, vast amounts of capital were not freed up, they were sequestered, and subsequently $60T in potential capital was destroyed.
At the end of the day, on one point I agree, destruction of capital is bad for business. That's why the global economy is sucking wind and on the verge of asphyxiation. We also have no need to "imagine" such a world, as we are living it's consequences.
So yes as DDLA stated, "but none of this has happened". How could it? Freeing up of capital and the natural life death cycle can only occur in a free market.
With all the "heroic" CB interventions, this market is anything but. And that is the false premise upon which the construct of "nothing could be better than what the Fed has done" is based.
The rabid insistence that there is nothing else nor better, than the heinous crimes which have been committed, many involved should be rotting in prison, and that these seemingly innocent and bumbling central bankers...
who faithfully do their masters bidding, are somehow innocent heroes, who had NO other choices, leaves those who believe "nothing could be better than what the Fed has done" to only contemplate a universe where the bail outs, QE, ZIRP and NIRP were and are the only possibility. And a miserably failed one at that.
In summation, this comical MSM parroting construct is based on a false premise that something else would have been better and should have and could have been done. Which anyone not practicing "conscious ignorance" in a bubble like existence, and with a lick of common sense would tell you, most definitely could and should have.
In addition, this MSM myopia conveniently ignores and discounts the deleterious effects that such perversions of nature (there is something unnatural in this) have on markets and economies, such as zombification.
That is witnessed by those acolytes or proponents of said fallacies inability to comprehend how central banks have artificially suppressed rates through monopolizing the bond market float. Or how Trillions in capital has been sequestered and destroyed.
Or how if this situation is not rectified in much shorter order than most think, what happened with the recent implosion in the JPG 10 yr yield or civic explosion in Turkey, is just the tip of the iceberg.
Sorry that these "nothing could be better than what the Fed has done" acolytes seem to be trapped in a "Fed speak" world, but not sorry to burst their bubble, pun intended.
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