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Old 03-06-2019, 04:46 PM
Danny B Danny B is online now
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,488
inflate to survive,,,MMT to the rescue,,,falling consumption

China tried to crash the party. They industrialized in record time. They had to print more that all the other CBs combined.
Here is a long technical paper showing that they can't stop printing. China created a fake economy that can never stand on it's own. Their greatest fear, DEFLATION.
"Behind everything is the same thing. Keynes was right. Inflation is one monetary evil, but its twin is far, far worse. At least with inflation things are moving, Chinese peasants are progressed up into the middle class even if it is more expensive when they get there."

"Deflation, however, is when everything stops; Danteís Hell was freezing cold. It doesnít have to be all at once like in the early thirties, this can be a prolonged affair dragging out across more years than anyone cares to remember. The frog isnít being slowly boiled, it is being progressively frozen. It is now almost completely frigid, too cold to be able to leap out of the icy water. Stuck here without any other options, it must conserve its energy as best it can and hope that it can somehow survive.

If given a choice, you pick the heat of high inflation over this every day of the week; until you realize it isnít your choice. It never really was."
Great graph, https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=1nTmYMnr

Armstrong, "We are all connected. There is no possible way for any country to move counter-trend to the whole. The European Central Bank and the Bank of Japan have destroyed their bond markets. Their stupid idea of Quantitative Easing and lowering rates to zero and negative was under their theory that people would borrow if it was cheap enough. Over the years, I have received calls from banks asking me if I wanted to borrow money. They call because we run high cash balances and have no debt. They always want to lend money to people who do not need it,"
"But I am talking about borrowing to expand or buy some business. That is what the Central Banks failed to grasp. If there is no CONFIDENCE in the future, you will not borrow at any rate."
Not completely true. U.S. consumer debt is about $13 trillion. Plenty of people have no plan to pay off their debts.
"As far as the US Federal Reserve, its holding of federal debt is under 20% of the $22 trillion and 30% of the debt is held by foreign governments with 28% held by interagency. The US could not be saved if the Fed tore up its bonds. It is not enough."
"The pension funds are also linked to government debt. Defaulting on government debt would wipe out all pension funds. The interconnectivity is not considered by so many who summarily assume we can just tear it all up."
That's where MMT comes in.

"They will raise taxes dramatically trying to survive. But governments cannot avoid their collapse for nobody is willing to step up and take decisions for the long-term.
Do not worry, I am sure that when the time comes, the Dems and Reps will work together very closely to bring it all under control.

The bond market is the big kahuna, not the stock market. GOV pushes everybody to focus on the stock market because it is more easily manipulated. Capitalization of the stock market is $40 trillion but, nobody seems to be nervous.
BUT, the stock market eventually depends on consumption. Earnings have been heavily falsified by buybacks but, eventually earnings must fall in accordance with consumption. Consumer debt is about $13 trillion but, even the deadbeats are maxxed out.
Rising interest rates are wiping out consumption.
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