{"id":15587,"date":"2015-12-23T11:29:33","date_gmt":"2015-12-23T16:29:33","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15587"},"modified":"2015-12-23T11:29:55","modified_gmt":"2015-12-23T16:29:55","slug":"the-keynesian-recovery-meme-is-about-to-get-mugged-part-2","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15587","title":{"rendered":"The Keynesian Recovery Meme Is About To Get Mugged, Part 2"},"content":{"rendered":"
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The Keynesian Recovery Meme Is About To Get Mugged, Part 2<\/a><\/h3>\n<\/header>\n
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Our point yesterday was that the Fed and its Wall Street fellow travelers are about to get mugged by the oncoming\u00a0battering rams of\u00a0global deflation and domestic recession.<\/div>\n
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When the bust comes, these foolish Keynesian\u00a0proponents of everything is awesome\u00a0will be caught like deer in the headlights. That\u2019s because\u00a0they view the world through\u00a0a\u00a0forecasting model that\u00a0is an\u00a0obsolete relic\u2014one which essentially assumes a closed US economy and that balance sheets don\u2019t matter.<\/p>\n

By contrast, we think\u00a0balance sheets and the unfolding collapse of the global credit bubble matter above all else.\u00a0Accordingly, what lies ahead is not history\u00a0repeating<\/strong><\/em>\u00a0itself in some timeless Keynesian economic cycle, but the last twenty years of madcap central bank\u00a0money printing\u00a0repudiating<\/strong><\/em>\u00a0itself.<\/p>\n

Ironically, the gravamen of the indictment against the \u201call is awesome\u201d case\u00a0is that this time\u00a0is<\/strong>\u00a0\u00a0<\/em>different\u2014\u2014radically,\u00a0irreversibly and dangerously so. High powered central bank credit has exploded from $2 trillion to $21 trillion since the mid-1990\u2019s, and that has turned the global economy inside out.<\/p>\n

Under any kind of sane and sound monetary regime, and based on\u00a0any semblance of prior history and doctrine, the combined balance sheets of the world\u2019s central banks would total perhaps $5 trillion at present (5% annual growth since 1994). The massive expansion beyond that is what has fueled the mother of all financial and economic bubbles.<\/p>\n

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

Owing to this giant\u00a0monetary aberration,\u00a0the roughly $50 trillion rise\u00a0of global GDP during that period was not\u00a0driven by the mobilization of honest capital, profitable\u00a0investment and production-based gains in income and wealth.\u00a0It\u00a0was fueled, instead, by the\u00a0greatest credit explosion ever imagined\u2014\u2014$185 trillion over the course of\u00a0two decades.<\/p>\n

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

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

The Keynesian Recovery Meme Is About To Get Mugged, Part 2 Our point yesterday was that the Fed and its Wall Street fellow travelers are about to get mugged by the oncoming\u00a0battering rams of\u00a0global deflation and domestic recession. When the bust comes, these foolish Keynesian\u00a0proponents of everything is awesome\u00a0will be caught like deer in the […]<\/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":[5979,2120,303,305,4512,451,467,534],"class_list":["post-15587","post","type-post","status-publish","format-standard","hentry","category-economics","tag-contracorner","tag-david-stockman","tag-fed","tag-federal-reserve","tag-fomc","tag-janet-yellen","tag-keynesian-economics","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15587","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=15587"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15587\/revisions"}],"predecessor-version":[{"id":15589,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15587\/revisions\/15589"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}