Or maybe they won't learn, since they clearly enjoy serial mass delusion...
Idiotically, just as the reflation delusion final imploded in the U.S. last week, it has now taken a feverish hold over the rest of the world, largely due to the imploding $US dollar which has caused a mass exodus of capital to other currencies, emboldening global Central banks. All due to stagnant U.S. wages...
Last week, the Bank of Canada did the "unthinkable only a few months ago" by raising interest rates, indicating more rate hikes are likely in the future:
The Australian Central Bank is the odd man out of the global reflation delusion, however, the Aussie Dollar is rallying anyways due to the weak $USD:
"...the efforts of the Reserve bank to get the exchange rate down have been failing for two years"
The reason for Friday’s surge was that American retail sales fell, against expectations of a rise, and the monthly CPI change was zero
[U.S. Reflation] seemed like a one-way bet, including a lower Aussie dollar, except it wasn’t. How did everyone get it so wrong?
...[U.S.] employment and wages have decoupled. Two weeks ago, the Fed put this down to weak productivity, which it couldn’t explain...
Then he explains the limitations behind CappuccinoConomy, which I've been describing for a decade:
"I have an explanation they can have for free: productivity is low because those who lose their jobs to more productive and less expensive machines become less productive because they end up doing something they’re not as good at...When a firm replaces workers with machines, they don’t produce more stuff because output is determined by demand — they just reduce costs."
Of course he never mentions the role of 0% capital in funding automation, compliments of imported deflation, because that would throw doubt on Globalization itself, which is not allowed. Meanwhile, finishing his story, the jobless consumer makes up the difference with debt, until it all implodes with extreme dislocation. No one sees it coming...
Aussie Dollar [$USD] with commodities (black):
EM stocks (red) led the world last week
Here shown with EM currency basket (black).
This will last about as long as a Bitcoin rally...
They will be surprised to learn, AGAIN, that rising currencies do not portend reflation...
