{"id":13136,"date":"2015-10-08T06:13:50","date_gmt":"2015-10-08T11:13:50","guid":{"rendered":"http:\/\/olduvai.ca\/?p=13136"},"modified":"2015-10-08T06:13:50","modified_gmt":"2015-10-08T11:13:50","slug":"bernankes-balderdash","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=13136","title":{"rendered":"Bernanke\u2019s Balderdash"},"content":{"rendered":"

Bernanke\u2019s Balderdash<\/a><\/h3>\n

The US and world economies are drifting inexorably\u00a0into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable \u201cmorning after\u201d consequence of the 20-year\u00a0global credit binge which has now reached its apogee.<\/p>\n

The apparent\u00a0global boom during that period was actually a central bank driven\u00a0excursion into the false economics of\u00a0household\u00a0borrowing to\u00a0inflate consumption in the DM economies;\u00a0and frenzied, uneconomic\u00a0investing to inflate GDP in China and the EM.<\/p>\n

The common denominator was falsification of financial prices.\u00a0By destroying honest price discovery in the financial markets, the world\u2019s\u00a0convoy of money-printing central banks led by the Fed elicited a huge excess of financialization relative to economic output.<\/p>\n

The central manifestation of that was\u00a0$185 trillion of debt growth during the past two decades\u2014\u2014a stupendous explosion of credit which amounted to 3.7X the expansion of global\u00a0GDP.<\/p>\n

And even that ratio is an understatement. That\u2019s because measured GDP\u00a0has been artificially\u00a0bloated by the monumental worldwide\u00a0malinvestment and excess capacity arising from the credit bubble. That is, phony\u00a0\u201cgrowth\u201d which under the laws of economics will be liquidated in due course.<\/p>\n

\"Global<\/a><\/p>\n

But you wouldn\u2019t have known that\u00a0the global economy is about to hit the skids\u00a0from Monday\u2019s action. Bernanke kicked off the day in a Wall Street Journal op ed taking a bow\u00a0for \u201csaving the world\u201d.<\/p>\n

Then\u00a0the\u00a0stock market completed a rally from Friday\u2019s post-NFP low, which amounted to\u00a084 points (4.5%) on the S&P 500\u00a0during a\u00a0seven-hour span of trading.\u00a0 That was even less time to\u00a0\u201cmission accomplished\u201d than last October\u2019s three-day Bullard Rip.<\/p>\n

So here we are again\u00a0circling the 2000 mark on the S&P 500\u2014a level first crossed 440 days ago.\u00a0Undoubtedly, the\u00a0casino is knee-jerking upward\u00a0because Goldman has already made an unsecret audible call, instructing the Fed to substantially defer lift-off\u00a0well into next year.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Bernanke\u2019s Balderdash The US and world economies are drifting inexorably\u00a0into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable \u201cmorning after\u201d consequence of the 20-year\u00a0global credit binge which has now reached its apogee. The apparent\u00a0global boom during that period was actually a central bank driven\u00a0excursion […]<\/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":[68,9690,124,130,1851,5979,2903,2120,202,303,305,1264,7485],"class_list":["post-13136","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ben-bernanke","tag-capital-spending","tag-central-banks","tag-china","tag-commodity-price-collapse","tag-contracorner","tag-credit-binge","tag-david-stockman","tag-deflation","tag-fed","tag-federal-reserve","tag-recession","tag-world-trade"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13136","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=13136"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13136\/revisions"}],"predecessor-version":[{"id":13137,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13136\/revisions\/13137"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}