Beyond Monetary Policies

Submitted by saldeck on Wed, 03/02/2016 - 05:22.

Finance ministers and central bankers met in China to discuss many of the problems for which they alone are responsable.
Neoliberal ideology has dominated world discourse. The mantra has been that the only viable policy for goverments and social movements was to give priority to something called the market.

Of course, allowing the market to prevail necessitated political action. The so-called market was never a force independent of politics.

Is that day over? Is there what a recente article in Le Monde called a timid return by Establishment institution to concern about sustaining demand?

The IMF had long been the strongest pillar of neoliberal ideology, imposing its requerements on all governments that sought loans from it. However, the IMF worried openly about how anemic world demand had become. It urged the finance ministers of the G20 move beyond monetary policies to encourage investments in order to sustain demand by creating jobs. This was quite a turn-around for the IMF.

The dollar still seems the relatively safest place for governments and the wealthy to park their money. But deflation seems to have become the dominant reality of most Europe.

Will the timid moves recommended by the IMF stanch the reality of declining world demand? Will the dollar be able to resist a further loss of confidence in its ability to be a stable depository of value? Or are we moving toward a further, much more severe, wild swing in the so called market, with all political consequences this will entail?

Effective demand is the sine qua non of capitalism as an historical system. Without effective demand, there can be no capital accumulation. That is the reality that seems to be creeping in.

It is not likely however that the timid attempts to deal with this new reality can in fact make a difference. The structural crisis of our system is in full bloom.

The big question is not how to repair the system but with what to replace it.

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Which stimulated the following O&G thought.

The Failure of Macro-economics

Quite a bit yet remains for us to write about, saldeck; and knowing the way ”aggregate minds” of the trade work provides us with a stretch of time to write several tomes before they change direction to really begin the fight to survive.

Faced with the battle to reconcile poor theory with adamant reality, the Economics trade may be at a low point in its development currently. Its attempts to apply policy measures in most economic phases – fiscal, monetary, markets – in search of balance and recovery are confounding. Of the two ends of the remedial scale, that is, the “practical austerity” or rebuilding by incurring more fiscal debt, neither appears capable of salvaging our disabled systems. To the Economists, the result indicated in either case is whether we spend or don’t does not influence the marketplace, output, investments or consumer demand. We seem at a loss, with no idea how to elicit positive response in any case.

Henry Hazlitt, the maverick economics writer of a half century ago, in a 1959 critique of Andrew Dickson White’s Fiat Inflation In France wrote -

The story that A.D. White tells is complete in itself. It carries its own moral. But just as the French in 1790 had failed to learn the lessons of the inflation of seventy years before, in John Law’s time, so the present day world has failed to learn the lesson of assignats. Perhaps the study of other great inflations. . . would help to underscore and impress that lesson. Must we, from this appalling and repeated record, draw once more the despairing conclusion that the only thing men learn from history is that man learns nothing from history? Or, have we still time enough, and sense enough, and courage enough, to be guided by these dreadful lessons of the past?

It’s a thought that has passed through these pages several times over, an admonition which applies today, and will probably prove a suitable response to any of the next hundred or thousands of central bank inflationary faux pas for the next two thousand years. . . should the race last that long on this earth. Something might impel us to conclude there would be such an ending at our current pace toward impoverishment. Humans will be living in earthen and sod huts in a hundred years and wearing animal skins soon after, unable to afford much beyond that, driven to that state by educated men of science. Education may yet be our downfall. Remember Alexander Pope's admonition,

A little learning is a dangerous thing,
Drink deep or taste not the Pyerian spring.

But for the current day, we do have some impatient factions casting blame for the stagnation on theoretical inadequacies, or mistaken policy choices, while the majority of the scientists may be committed more toward the belief that expectations are limited due to constantly changing, inefficient personal interests which do not serve the propagation of the species.

This is not a confidence builder if we are to consider that this band of scientists has been chasing after answers for three hundred years and have consistently chosen the wrong direction when confronted with a fork in the road. Our army of economists exhibit no understanding of the social/industrial/commercial/financial complex they’ve helped build; and though they speak of the optimum, none of their policy choices interferes with our taking the circular route back to the same starting point repeatedly.

We’ve had enough of this science steeped in half-supposition, half-cryptology and half superstition – and, in total, does not fit!

What they have committed to is that the markets cannot be controlled, our longer term output and employment statistics are moving in the wrong direction and our theories promote decreasing effectiveness, shun stability like the plague, and promote the imbalance of inequity.

We’ve published our thoughts about deficiencies before, quoting such stalwarts as Adair Turner, Charles Goodhart, William R. White, Minsky and Kindleberger and other occasional dissenters who cannot be easily dismissed with a rogue label. Attention has been directed toward the smaller faction of dissenters, quoting them for seven long years now. The complaints appear to be more acceptable now, but of insufficient strength to reject the faulty policies that send us off in the wrong direction again and again.

Something is missing. When a scholar sits down to churn out a self-propelling mechanism with only distant references – if at all – to the engine driving the mechanism, it shows only that he/she believes in the fairy tale of perpetual motion and mysterious forces. Or, when he/she turns out a depiction of a complete system but never closes off a single one of the hundreds of elements of the system, it should not be considered complete, no matter how attractive the coat of paint used to detract attention from flaws.
There is only one way out from reproducing this unfortunate and destructive circular path ad infinitum: include the last essential element and begin anew.

That is O&G’s latest preoccupation. But, again, due to normal expectations – those well-known ravages of time – the start he can provide may be dismissed too easily for not meeting today’s stringent criteria for acceptable theory. . .
Be like us! Work as we do.

To which we’re prompted to reply, “Would you depend on a man my age, who spends all his sleeping hours, lying awake, staring at dark ceilings, and all his daylight hours drifting off into naps at the drop of a hat? Hoping, through it all, that he can save those thoughts that spring on him unexpectedly from the slightest related mental hiccup and fade off just as quickly as they appeared?”

Things Are Out Of Control

The BIS Quarterly Review (March 6, 2016) - Uneasy Calm Gives Way To Turbulence - demonstrates two things that are now obvious.
First, that the neoliberal Groupthink that created the crisis in the first place, and, which has prolonged the malaise, continues to dominate the leading international financial institutions.
Second, not only are these institutions impeding return to prosperity as a result of their continued adherence to failed macroeconomics, but worse, their patterned behavior actually introduces new instabilities that ferment further crises.
Someone should be held accountable for the instability these organizations cause, which, ultimately, leads to higher rates of unemployment and increased poverty rates.

The BIS claims that:

" Underlying some of the turbulance was market partecipants' growing concern over the dwindling options for policy support in tha face of the weakening growth outlook. With fiscal space tight and structural policies largely dormant, central bank measures were seen to be approaching their limits."

What the BIS meant by "structural policies" tipically involve attacks on workers' pay and conditions, reduction in pension etitlements and harsher income support rules ( to push people off).
Cutting incomes and pensions make that situation worse. Millions of people reamain without jobs as a consequence of the deliberate restrictions that politicians have acceded to under pressure from the likes of the morons of the BIS.

There is a massive fiscal space available to bring idle labour resources back into productive use and earning incomes through large-scale public employment initiatives and higher levels of public infrastructure spending.
Contributing to the general climate of uncertainty and confecting crisis, undermine the morale of the workforce and this translates into lower productivity growth.
With governments poised to inflict further damage via fiscal cutbacks and everyone seeing the impotence of monetary policy, the conclusion that things are out of control is easy to make.

http://www.theguardian.com/business/2016/mar/07/gathering-storm-for-glob...

So Comes The Conundrum

What happens when the unstoppable movement of macro-economic manipulators collides with the unyielding racket of corrupt wealth? We will soon know, but in the interim... I'm still accumulating nontraditional assets. Very soon-- the taunt "bring it on" will refer to a place in a gas chamber for those who aspired to control everything instead of work for it. Two groups of stupid ending an era the old-fashioned way... compromising the mechanism with sludge.

The BIS claims that: "Underlying some of the turbulence was market participants' growing concern over the dwindling options for policy support in the face of the weakening growth outlook. With fiscal space tight and structural policies largely dormant, central bank measures were seen to be approaching their limits."*

* What it means is-- the unwavering participation in false markets made them integral until someone pulled back and it began to teeter off it's false foundation. This would make financial sectors globe-wide-- global security threat mechanisms. Global debt keeps rising and consumers everywhere are opting out. A 4.8% unemployment rate inclusive to a minor segment of the population guarantees an uprising but not particularly one with pitchforks and torches. The REAL possibility of simply not paying on the gross debt by consumers in obligation wipe out two types of pariah at once... financial bankers, and lawyers.

Whatever happens, happens this year. At one point, gutless wonders ruin the party.

Greed and Grasping hands at work

If they are not restrained once and forever there will be no recovery - ever!

Stefano Micossi, of Assinome and a host of other involvements on the continent, has offered another article on voxEU.org reached through this link.

http://www.voxeu.org/article/banking-crisis-yet-again-and-how-fix-it

Cause and cure is simple,but will not be followed - the greed and grasping hands need to be restrained and discouraged or fiat inflation will doom the system. if it is not already poised to do so.

Capital is simply not there when currency is hoarded indiscriminately. Replenishing Capital is needed in circulation or the system collapses as we stnd by and watch helplessly.

Short-sighted modern day highwaymen care not a fig for the system.

A verity for the ages.

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Shortened reply due to the ghost of 403.

Stefano Micossi's solution

One source of the EU's problems is the inordinate load of non-performing loans. Banks, Micossi reports, "appear barely able to satisfy current prudential requirements, thus leaving insufficient room to restructure the stockpile of non-performing loans - some $900 billion in total. . . - and [the] potential losses from large three-level (toxic) assets and derivative positions (especially in German and Swiss banks)."

This of course, spreads fears of bail-in among the banks creditors in the event of write-offs.
He warns of a new instability taking place. Apparently, the first step is for Europe's central banks assuring the populace that banks will be supported in the event of securitizing required and the dealing with the "level-three" assets and restructuring the non-performing loans. Would the populace, after the already two-time stumble of EU banks (2008 and the current insecurity), accept such offered assurances as genuine? The vaunted stress tests had to be readdressed to correct deficiencies and though banks fared better the second time around the subsequent difficulties revealed whatever confidence was generated, faded quickly. and ended in the heightened malaise of 2016.

A coupled proposal in Micossi's plan is to allow regulators to free up banks to present "credible business plans to improve profitability", by "cleansing balance sheets", "rationalizing business models", and extending more time for banks to meet capital targets which they have not yet approximated. This, then, if adopted will prove as unconvincing as the first round of stress tests; the prospect will be a second attempt will be required.

Not mentioned is the possibility of sounder regulations restricting banks in their likely search for more targets for marketing additional instruments of speculation - via something similar to another wave of derivatives; nor is anything proposed similar to the Volcker plan or the "ring-fence" concept to force banks out of the speculative business. Micossi goes in the other direction, suggesting that the bail-in prospects and tight capital restrictions already in place should be loosened. This is not a move in the direction of prudential governance that banks need in such times. And, it won't be offered unless banks express willingness to accept it, which is doubtful.

If this program is followed the only likely result will be a sizable write-down and unless taxpayers are put under the gun by way of sovereign support to banks, there will be additional difficulties. If banks are not forced into the position of suffering the burdens alone, fiscal policy will become entangled in the bail-in and/or further QEs and taxpayers will be dragged into the melee, fiscal policy will find itself under unsustainable siege and crisis recovery will be pushed off further into the future.

O&G's judgment is that with such a program as Micossi suggests, another ten years could easily be added to expected recovery after European nations adopt the strategy which could be some time before details are ironed out and it's determined which nations cannot afford to join in. There will be several. And they all seem to be in the peripheral nations - although none of them appear strong enough to carry the heavy burden of any exported support for banking.

What is sorely needed is a shake-up to the banking structure and recall of the commitments causing the stress. . . which no one affiliated with European banking would be willing to so much as consider. Thus, the struggle will continue.

This Era Ends Abruptly

I re-read the interpretations of the Dodd Frank Act last night. There is an old loan program I could resurrect that would do America good right now. I wanted to see if modern Law might be restrictive to it. The answer is- no. Dodd Frank does not inhibit loan programs, it inhibits banks from omnipotent actions that create Too Big To Fail states and statuses. It also dictates who the Federal Reserve will bail; which is interesting, because the Fed has bailed Big Oil to a tune far in excess of banks during the 21st Century.

Loans. The definition of credit is: the extension of money for good purpose based on a trust relationship. The key to credit extension is-- good purpose, and since trust is relative to security, the value of collateral is critical to the relationship. The other day I questioned WHY the Federal Reserve wants everyone to refinance their mortgage. The answer-- swap outs. New loans to replace old garbage. Unfortunately, without validity in collateral, it's just garbage replacing garbage.

Validity. A stock, commodity, contract, whatever the vessel... is only valid if it can be supported by real facts. Mortgages are supposed to be backed by collateral interest in real property. The model for real estate value now is a cup with an open mouth and a hole punched through it's bottom. All flow, straight to losses. Homes sell based on selective criteria estimated, not validated, by a modern appraisal. The credit extended on them is largely based on other sales, not integrity or viability as an asset.

Performance. A lender takes in proof of income from people beholden to manipulated employment contracts that do not offer stability. As long as the At-Will Employment Act continues to exploit workers, no income is validated by the earned wage but by the length of agreement to employ. Since nearly 100% of all entities do not do enterprise today, they manipulate finances, there is ZERO employment stability and thus, ZERO value to income verification. An unemployed destitute person has more "stability" in existence than nearly everyone else because of what they don't have, rather than what they do have... because all assets today are predicated on fake printed money and dark pool arrangements.

I find the landscape-- titillating. We NEED to end secular stagnation. We do that by collapsing the falseness the Central Banks have created. A house is worth what a borrower can afford to pay monthly on it's Note. The more we forego the obvious-- keeping borrowers gainfully employed and building personal not market assets, the more valid the home prices are. Job stability requires recognition of skill sets and vanquishing administrative dominance to restore public confidence. A confident public drives an economy and enterprise responds.Literally, every single financial move since the Tax Reform Act of 1984 has led us to this End-Game condition and reversing it as well as evaporating all the fake-printed now-hoarded money is the key to restoring validity, which in turn stabilizes the portfolios and recovers the economy.

How do we do that? Close the banks- leave no existing bank intact. Collapse them all and restore Glass-Steagall. End the Federal Reserve-- every Central Bank worldwide looks like this: A toxic portfolio of non-performing asset drain on economy, an authority to force continuous dilution of currency that barely courses through Main Streets. It's not functional at all. Get RID of Wall Street. If stocks were dissolved as-is, the vast majority of printed unsubstantiated monies globe-wide would disappear and along with them-- every garbage financial contract and the false value of commodities. One big giant POOF. What would exist in lieu is the fundamental mechanics of industry and commerce. The resulting need for a new currency would be predicated on two venues-- work hours and survival. Medical, research, development, innovation, invention, science, commerce, industry... all aspects requiring those involved to WORK. Investment, finance, credit, politics... not so much. These require a return on investment and a knowledge of Risk Management (which does not exist today). Administration always was at secretarial level. Those involved ALWAYS fantasized wielding a power without earning it engaged in function. They should never again be a liability to the world, ever paid more than a minimum and NEVER left unsupervised. An education without warranty isn't worth the paper the degree is printed on, and any job lost to technology BETTER get replaced or technology is erased. It's a tool, not a mental capacity substitute.

Ironically... all this said isn't fantasy nor is it impossible. Of the 8 original bastions I perceived causing all of our crises... 7 of them are not integral today and 2 are hemorrhaging. We cannot wait 10 years for more theory to spew failure-- collapse resolves all- instantly. It is straight ahead now.

The Struggle Will Continue

The spirit of global co-operation and desire for a harmonized set of global financial rules to prevent further blow-outs, evaporated.
The climate of disagreement between nations, global banks and financial institutions, intensified. The financial sector and its lobbysts have done and do all they can to adulterate, block or water down any reforms. These reforms have had the perverse effect of increasing and not decreasing financial instability.
The Basel Accords were introduced to protect consumers from bad banking practices. Why did the Basel accords fail so miserably and what can be done to ensure better regulation of the banking industry? They have a vested interest in preserving the existing system.
Business as usual for banks. Years of rules have done nothing.

The BIS report fails to blame central banks for any of the problems for which they alone are responsable. The sluggish performance of the global economy, the massive debt overhang and the erratic behavior of the stock market are all directly attributable to the cheap money policies implemented by central banks.
While it is true that China is facing slower growth, oil prices are plunging, it is also true that central bank policy is not primarly designed to address these problems, but to ensure the continued profitability of its main constituents, the big banks and mega-corporations.

Why the BIS expressed alarm only now? Because profits are down and when profits are down, Wall Street and its corporate allies lean on the central banks to work the levers to improve conditions.
When the prifitability of the world's biggest corporations are at stake, the central banks will move heaven and earth to lend a hand.

Calling a spade a spade.

Shortened comments call for blunt language.

It's about time the usurpers were forced into truthful labeling.

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Also, saldeck, I've downloaded the recent BIS quarterly report and will comment on it.

Thank you for alerting us.

ZERO

The Fed put rate hikes back on the table. They are begging for new credit to replace that crap they absorbed during Operation Twist. It's certainly a bunch of twisted paper for sure, credit it is not. The problem is-- the new stuff looks just as bad.

Gasoline has jumped some 50 cents per gallon and much faster than the rise in oil barrel prices suggest it should, A speculation-- $5 gallon gas by Summer. ZERO economy.

On a game board, a billionaire is an oozing blob without arms or legs. You plop it somewhere and it monopolizes but has not other value. It seemingly cannot be harmed but since every other player merely continues by going around it, billionaires tend to dry while being over-exposed to light and wind. All the billionaires are out of the box right now. The weather is getting warmer, breezes blow and the lights grow brighter as the arena heats up. There are no points gained when billionaires shrivel up, just better passage from to there on the board as so the game changes.

The game changes now. Wealth does less and less for minions who are learning and adapting without them.

Sander's remarks to the Vatican

A refreshing change when compared to the political nonsense that the USA seems to go through ever four (8?) years. The following link provides the transcripts (prepared):

https://berniesanders.com/urgency-moral-economy-reflections-anniversary-...

A few of the comments:

"Over a century ago, Pope Leo XIII highlighted economic issues and challenges in Rerum Novarum that continue to haunt us today, such as what he called “the enormous wealth of a few as opposed to the poverty of the many.”

And let us be clear. That situation is worse today. In the year 2016, the top one percent of the people on this planet own more wealth than the bottom 99 percent, while the wealthiest 60 people – 60 people – own more than the bottom half – 3 1/2 billion people. At a time when so few have so much, and so many have so little, we must reject the foundations of this contemporary economy as immoral and unsustainable."

"We are now twenty-five years after the fall of Communist rule in Eastern Europe. Yet we have to acknowledge that Pope John Paul’s warnings about the excesses of untrammeled finance were deeply prescient. Twenty-five years after Centesimus Annus, speculation, illicit financial flows, environmental destruction, and the weakening of the rights of workers is far more severe than it was a quarter century ago. Financial excesses, indeed widespread financial criminality on Wall Street, played a direct role in causing the world’s worst financial crisis since the Great Depression."

"... Politicians joined hands with the leading bankers to allow the banks to become “too big to fail.” The result: eight years ago the American economy and much of the world was plunged into the worst economic decline since the 1930s. Working people lost their jobs, their homes and their savings, while the government bailed out the banks.

Inexplicably, the United States political system doubled down on this reckless financial deregulation, when the U.S. Supreme Court in a series of deeply misguided decisions, unleashed an unprecedented flow of money into American politics. These decisions culminated in the infamous Citizen United case, which opened the financial spigots for huge campaign donations by billionaires and large corporations to turn the U.S. political system to their narrow and greedy advantage. It has established a system in which billionaires can buy elections. Rather than an economy aimed at the common good, we have been left with an economy operated for the top 1 percent, who get richer and richer as the working class, the young and the poor fall further and further behind. And the billionaires and banks have reaped the returns of their campaign investments, in the form of special tax privileges, imbalanced trade agreements that favor investors over workers, and that even give multinational companies extra-judicial power over governments that are trying to regulate them."

"Some might feel that it is hopeless to fight the economic juggernaut, that once the market economy escaped the boundaries of morality it would be impossible to bring the economy back under the dictates of morality and the common good. I am told time and time again by the rich and powerful, and the mainstream media that represent them, that we should be “practical,” that we should accept the status quo; that a truly moral economy is beyond our reach..."

Neo-liberal Hell

The debt system, free trade agreements, tax evasion and power asymmetries in the World Bank, the IMF and the WTO are all major reasons that inequality is getting worse. There is nothing natural about extreme inequality. It is man-made. It has to do with power.

We once believed the Earth was flat. At some other point in history, alchemists were convinced that they could take base metals and turn them into noble metals. More recently, the German Nazis convinced a nation that there was a Master Race.
The world is, once again, in the grip of another major deception. On the world stage, the IMF prances around, wiping the blood of millions of citizens that it has impoverished over the years , lecturing nations on off with even more loot. Loot is what pirates stole. These looters, however, do not even have the panache and elan that we associate with the romance of piracy. They are just sociopaths and cheats.

Short history of dates.

March 3rd saldeck posted her first comment, "Beyond Monetary Policies" which should have been featured as a seed deserving of its importance. A few days later, the 8th of March, she flollowed with "Things are out of control" when she casually mentioned the BIS quarterly Review offered publicly March 6th.

She has high standards, this has been apparent from the first when she joined in on the tsunami thread. . . high and laudable.

A visit to the BIS site to download the Quarterly review, which O&G subsequently reviewed briefly in a posting dealing with the IMF April publication, and coupling the OFR report, along with mention of the IMF's four consecutive downgradings of the "economic outlooks" suddenly took on new meaning in these quarters and called for a revisit to the references in the bibliography of the BIS Quarterly review. They were eye-opening and called for a return to the BIS site for more careful examination. A number of papers, working and other sorts, were downloaded.

A mid-April voxeu article by Claudio Borio and three of his alert compatriots at BIS trumpeted "Financial Cycles, labour misallocation, and economic stagnation". The original BIS working paper, "Labour reallocation and productivity dynamics, fiannacial causes, real consequences" was retrieved, printed and read. The marignal notes generated and the bibliography of that work sent this aging detective back to the BIS site again.

The BIS staff has been busy, indeed. And, I believe their current presence of mind is stimulating other active thought. If nothing else, their acknowledgement of conditions are changing considerably and appear to be influencing thought trends within the economics trade. Blanchard is gone from IMF, replaced by Maurice Obstfeld. but his legacy may be carried on, since the tone is definitely set by Christine LeGrande, who is strong-willed on her own and not hesitant in calling a spade a spade.

All those pertinent downloaded works whose titles whet the appetite have not yet been reviewed; and, if satisfaction in seeing a turn toward an emphasis that satisfies a determined outsider, ranting on for several years for a comeuppance to those responsible for the recession, or pinning responsibility on the proper parties and the improper policies along with specifying the injustices forced on the general populace in a planned, designed program intended to strip value wherever it was found, this is a good sign.

So, it seems it takes a decade more or less of purposeless wandering through the same old same old before those in a position to influence thought work up impulses strong enough to turn it onto the culprits and the realities of thie anti-social behavior. What they have been doing to this point is using the same programs with different labels to cause then sure our diffculties. Doubt it? Think over the similarity between the credit which tosses out purchasing power that must again be constracted and causes pain in the process of ebb and flow; or the QEs that toss money out willy-nilly (or in reckless abandon, if you prefer) to lay in wait until its release to cause a flow whose multiple will amount to a hyperinflationary flood or worse - a tidal wave - the dreaded tsunami; or the protection offered by new committees, agencies and authorities, which accomplish nothing other than veil the chain of responsibility with confusion to the point where nothing can be done to correct the problem of inadequate regulation and supervision.

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WE HAVE BEEN USING NO MORE OR LESS THAN THE SAME TRICKS AND TRADES FOR A COUPLE OF HUNDRED YEARS STRAIGHT, PUTTING OURSELVES DELIBERATELY IN HARM'S WAY AND HOPING THE SAME TACTICS WILL BAIL US OUT!!!!!

In truth, it does no more than guarantee that the game will continue. It has become an ingrained habit to teach the new youngsters coming along through the educational system, the sophistry made so essential to career development, to think the same way and do the same things to perpetuate the process of building bubbles, stripping value and currency and waiting for time to pass after the bubbles burst so that memories dull and the populace is again ripe for another round of the same.

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Latest in those expressing thoughts more clearly - meaning plain language - April 18, 2016, Paul Krugman, Princeton Professor, Nobel Laureate, international respect and all, published an article entitled, "Robber Baron Recessions"! How much plainer can you phrase that accusation? He applies it to a particular corporation, but it has a much wider-sweep than any one entity, private or public. It applies to the economy, since the named firm is simply casting itself in the same mold used by all, be they the financial, industrial production, service, FIRE sectors or whatever remains. And, Lo and behold, who should he point out as the culprit hehind it all? The Great Communicator!

It might give some consolation to posters here for all the slings an arrows wielded by hackers and hacks sufferd in the course of of our efforts to read two sentences about two thirds of the way through his Monday column -

"The obvious next question is why competition has declined. The answer can be summed up in two words: Ronald Reagan.

The Great Moderation was not really a great anything, unless you'd care to include something like "Surrender to the current line of robber barons" and their successors.

How much does that explain? Unending debt? Credit extension gone wild? Qualitative Easing in the trillions? Boom/Bust after Boom/Bust? Victimizing one and all "not-of-the-purple"? Contracting markets? Disappearing wages? Struggling for solid foothold on the slippery slopes of recovery?

This can be carried as far as one has the will to persist to cover all that has been and is being done.

And, apparently, it will be done here at Duff's, all things remaining equal. O&G marginalia now seems to run forever, and the outflow will continue as long as the Great Will permits. . . in particular if what is read in the thoughts generating from the Krugman-mentioned larger institution leads in the direction currently indicated, through BIS, IMF and others.

More comments on the BIS and IMF documents will follow. Those people have been busy at BIS under the inspiring guidance of Claudio Borio. . . as has the IMF staff, under LaGarde.