From this week’s cover of the Economist magazine.
The worship of inflationists and the religion of inflationism has reached new heights. Yes we are at the pinnacle of the central banking-inflationism bubble.
As the great Ludwig von Mises once wrote, “The favor of the masses and of the writers and politicians eager for applause goes to inflation.”
Yet all such optimism looks nothing new. The following article from the New York Times in March 1999 showcases an almost similar level of optimism where interventionism has been seen as an elixir to Japan’s economy.
Fourteen years after, yet still the hope for political magic to work.
Yes indeed, we are at the pinnacle of the central banking-inflationism bubble.
ReplyDeleteThe final phase of the Global Business Cycle will be commencing soon; the world will be entering into Kondratieff Winter most likely during the last two weeks of May 2013; another bust just like 2008, only much, much worse is coming.
With the commencement of competitive currency devaluation on Friday May 10, 2013, specifically with the world’s individual currencies excluding the US dollar, trading lower, and with not only Aggregate Credit, AGG, trading lower, but also the highly indebted Electric Utilities, XLU, as well, the world pivoted from Liberalism’s age of investment choice, to Authoritarianism’s age of diktat; the epoch of inflationism ceased, and the epoch of destructionism commenced.
In compliment of the currency traders, who have started a sell of the world currencies, the bond vigilantes have gained a nascient control of interest rates, as is seen in their call of the Interest Rate on the US Ten Year Note, ^TNX, higher to 1.95%, and a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening.
And during the week ending Friday May 17, 2013, the coordinated intensification by the central banks throughout the world for the reduction of interest rates, established Global ZIRP, with Bento te writing 511 Interest cuts and sluggish economic growth, causing a blow off stock market top, seen in the chart of World Stocks, VT, rising 1.2%, and seen in the chart of the S&P 500, $SPX, SPY, closing at 1,667, up 2.1% for the week; it has risen 1,000 points from the March 2009, 667 low, in 50 months.
A look back in time reveals that beginning with stock market confidence in Mario Draghis’ OMT in October, 2013, currency carry trade investment from a rising Euro Yen, EUR/JPY, Currency Carry Trade, seen in the chart of FXE:FXY, as well as a rush of toxic credit, seen in the chart of Junk Bonds, JNK, coupled with a sale of Gold, GLD, to close at $1,306, started a risk-on rally, flow of funds in the the S&P 500, SPY, as well as the Russell 2000, IWM.
The world central banks’ monetary policies of Global ZIRP, especially coming on strong since April 18, 2013, have finally started to turn “money good” investments, bad. A case in point is Australia’s Westpac Banking, WBK; in contrast, currency carry trade endowed, Lloyds Bank, LYG, US Too Big To Fail Bank Citigroup, C, and Regional Bank, RF, rose strongly in a Global ZIRP grand finale finish of investment mania.
It is sovereignty that provides order and begets seigniroage, that is moneyness. The rule of Liberalism’s democratic nation states provided a moral hazard, toxic credit, and global carry trade financed seigniorage, via the genius of the Milton Friedman Free To Choose fiat money system.
Seigniroage, that is moneyness, will no longer come from decmocratic nation states, which supported economic growth, global trade and corporate profitability; but rather from the word, will and way of sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as nannycrats in statist public private partnerships, the ECB, as they invoke mandates for regional security, stability, and sustainability.
As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is
pivoting the world from Liberalism which featured the Banker’s Regime, Milton Friedman Free To Choose, fiat money system to Authoritarianism which features the Beasts’ Regime, regional governance, totalitarian collectivism, debt servitude, and austerity, diktat money system.