{"id":13096,"date":"2015-10-07T05:56:47","date_gmt":"2015-10-07T10:56:47","guid":{"rendered":"http:\/\/olduvai.ca\/?p=13096"},"modified":"2015-10-07T05:56:47","modified_gmt":"2015-10-07T10:56:47","slug":"faith-in-central-banks-dwindles","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=13096","title":{"rendered":"Faith in Central Banks Dwindles"},"content":{"rendered":"

Faith in Central Banks Dwindles<\/a><\/h3>\n

Even Bloomberg Notices that Something is Amiss<\/strong><\/p>\n

As anyone who hasn\u2019t been in a coma knows, assorted central bank interventions have failed to achieve their stated goals over the past several years. A recent\u00a0article at Bloomberg<\/a>\u00a0focuses on their failure to reach their \u201cinflation\u201d targets.<\/p>\n

Of course, this particular failure is actually reason to celebrate, as it means that consumers have at least been spared an even sharper decline in their real incomes than has been underway in spite of relatively tepid increases in consumer prices (whereby it should always be kept in mind that whether or not such price increases are considered \u201ctepid\u201d depends on on the composition of the basket of goods and services relevant to each individual).<\/p>\n

\"inflation<\/a>Market-based inflation expectations in the major currency areas have crashed again \u2013 click to enlarge.<\/p>\n

Of course central banks\u00a0have<\/em>\u00a0succeeded in blowing up the money supply at truly astonishing rates since 2008, so prices in the economy have certainly been vastly distorted. The devastating effects of such price distortions are currently being visited on the oil patch, where credit-financed malinvestment on a stunning scale has occurred as a result of an erroneous appraisal of future oil prices. A slowdown in money supply growth in the US and China between 2011 and 2014 was all it took to take the wind out of the sails of this particular collective hallucination.<\/p>\n

\"US-winds-down-quantitativ-012\"Inflating the euro alone wasn\u2019t enough to keep oil prices afloat \u2026
\nIllustration by David Simonds<\/p>\n

To the delight of the financial industry, asset prices have been the main beneficiaries of money supply inflation, but deep down many market participants are presumably aware that the \u201cwealth\u201d ostensibly created by artificially pushing the prices of titles to capital to the stratosphere is just as ephemeral \u2013 it is ultimately nothing but phantom wealth. If everybody tried to cash in, it would disappear in a flash.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Faith in Central Banks Dwindles Even Bloomberg Notices that Something is Amiss As anyone who hasn\u2019t been in a coma knows, assorted central bank interventions have failed to achieve their stated goals over the past several years. A recent\u00a0article at Bloomberg\u00a0focuses on their failure to reach their \u201cinflation\u201d targets. Of course, this particular failure is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,83,124,2088,426,498,6170,9666,9665],"class_list":["post-13096","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bloomberg","tag-central-banks","tag-faith","tag-inflation","tag-malinvestment","tag-pater-tenebrarum","tag-price-distortions","tag-real-income"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13096"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13096\/revisions"}],"predecessor-version":[{"id":13097,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13096\/revisions\/13097"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}