Post-2008: Bailing out lenders by giving borrowers more debt
Contrary to the dunced narrative of the day, we do not live in the Weimar Republic. There is no mechanism by which today's monetary expansion makes its way into the real economy other than via Mega-yachts and artwork. Quite the contrary, while billunaires enjoy their $47 hot dogs at Davos, the Middle class is getting inexorably squeezed by massive debts and deflating wages. There is an inexhaustible supply of labour deflation waiting to be imported from the Third World at ever-lower cost. Once multinationals "use up" one country, they move on to the next cheaper one. Constantly trying to get production costs down to Perfect Competition's "marginal cost" aka. $2.50/day, which is where half of the world's population resides. The "motherlode"...
WSJ: Jan. 19, 2015:
Fed Officials on Track to Raise Interest Rates
"We need to raise interest rates before someone gets a pay raise"
“what I’m really watching for is underlying inflation—wage growth, prices,” he told reporters later. “My forecast is once we get through this slow path in inflation it will start moving back,” he said, adding, “I’m not expecting inflation to be 2% when we raise interest rates. I don’t need to be at the goal when we raise the rates.”
WSJ: Jan. 19, 2015:
Fed Officials on Track to Raise Interest Rates
"We need to raise interest rates before someone gets a pay raise"
“what I’m really watching for is underlying inflation—wage growth, prices,” he told reporters later. “My forecast is once we get through this slow path in inflation it will start moving back,” he said, adding, “I’m not expecting inflation to be 2% when we raise interest rates. I don’t need to be at the goal when we raise the rates.”
Econo-dunces have redefined the term "Recovery"
This is the measure economists used to use to assess inflation risk. A 20% output gap six years into "recovery" used to be called "recession":
Imported deflation visualized
U.S. Inflation expectations as imputed from Treasury Inflation-Protected Securities (TIPS):
versus
Emerging Market currencies
A gift delivered via the strong dollar:
U.S. Inflation expectations as imputed from Treasury Inflation-Protected Securities (TIPS):
versus
Emerging Market currencies
A gift delivered via the strong dollar:
Today's speculators couldn't give a fuck about the Middle Class, which is why they are clueless as to how this all ends i.e. sans monetization of fellow citizens.
