“Insanity: doing the same thing over and over again and expecting different results.” -Albert Einstein
Central banks are doing everything in their power to try to boost their weak economies right now. The amount of global QE is staggering and totally unprecedented.
Liquidity moves markets!Follow the money. Find the profits!
Financial markets have certainly responded well in recent years but these extraordinary policies haven’t had anywhere near the intended effect on the global economy. Why is that?
“One in six prime-age guys has no job; it’s kind of worse than it was in the depression in 1940.” http://www.npr.org/2016/09/06/492849471/an-economic-mystery-why-are-men-leaving-the-workforce …
An Economic Mystery: Why Are Men Leaving The Workforce?
Millions of men in their prime working years have dropped out since the 1960s — they aren’t working or even looking for a job. Factors including technology, education and family reasons play a role.
Jeff Snider makes a compelling case by explaining, “There is no money in monetary policy. The ‘clogged transmission channel’ isn’t clogged at all, it just doesn’t exist.” In short, so called “shadow banking” has taken effective control of the global monetary system while central banks have remained wed to outdated frameworks.
Then again, it could just be that central banks’ ability to inspire greater and greater debt creation has simply reached its limit.
‘Once you reach the end of the debt super-cycle monetary policy is essentially pushing on a string.’ http://www.cnbc.com/2016/09/13/bridgewaters-dalio-theres-a-dangerous-situation-in-the-debt-market-now.html …
Bridgewater’s Dalio: There’s a ‘dangerous situation’ in the debt market now
The debt market is in a “dangerous situation” as central banks around the world lose their ability to stimulate growth, the hedge fund giant says.
Consumers are now up to their eyeballs in debt…
…as are corporations.
Maybe they ought to start asking a very simple question before engaging in any further extreme policy: “Does it work?”
Attn: Central Bankers https://www.farnamstreetblog.com/2016/09/lee-kuan-yew-rule/ …
Lee Kuan Yew’s Rule
Lee Kwan Yew had a simple test to guide his actions: Does it work?
In that light, there simply is no evidence at all that extraordinary monetary policy does any good whatsoever.
Perhaps a more important question to ask then is: ‘What are long-term consequences of explicitly boosting asset prices and debt creation in such a massive way without achieving any concomitant boost in underlying economic fundamentals?’
‘Central banks have created a tremendous increase in hidden risk.’ http://www.cnbc.com/2016/09/13/elliott-management-founder-singer-low-rates-radical-monetary-policy-have-not-led-to-sustainable-growth.html …
Elliott Management founder Singer: Low rates, radical monetary policy have not led to sustainable…
Investors face risks they haven’t seen before due to the aggressive actions of global central bankers, Paul Singer of Elliott Management said Tuesday.
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