The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.
Wednesday, May 6, 2015
Another Monetary Policy Dunce-Fest Imploding. Right Now
Thirty year Treasuries with U.S. Real Estate (REITS)
Monetary policy summarized: Step 1: lower interest rates, tempting everyone to pull forward future consumption and take on massive amounts of debt.
Next, make-believe that the temporary pull forward in consumption constitutes a real economy, as economic indicators pause momentarily at "optimal" on their way to cratering.
Next, based upon the illusory moment of "perfect alignment" raise interest rates obliterating everyone who took on too much debt. Pray this isn't the time with all of the rioting (even as riots are already underway).
Yes. It's all that fucking stupid.
No. I'm not kidding.
(Past and current dislocations...) Subprime circa 2007