{"id":18133,"date":"2016-02-23T12:16:59","date_gmt":"2016-02-23T17:16:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18133"},"modified":"2016-02-23T12:16:59","modified_gmt":"2016-02-23T17:16:59","slug":"financial-time-bombs-hiding-in-plain-sight","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18133","title":{"rendered":"Financial Time Bombs Hiding In Plain Sight"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/davidstockmanscontracorner.com\/financial-time-bombs-hiding-in-plain-sight\/\" target=\"_blank\">Financial Time Bombs Hiding In Plain Sight<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<div class=\"pf-content\">\n<p>The\u00a0bear\u00a0will soon be arriving\u00a0in earnest, marauding through\u00a0the canyons of Wall Street while\u00a0red in tooth and claw. Our\u00a0monetary central\u00a0planners, of course,\u00a0will\u00a0once again\u2014for the third time this century\u2014\u2014be utterly shocked and unprepared. That\u2019s because they have\u00a0spent the better part of two decades deforming, distorting, denuding and destroying what were once serviceably free financial markets. Yet they remain as clueless as ever about the financial time bombs this inexorably fosters.<\/p>\n<p>The sum and substance of Keynesian central banking is the falsification of financial prices.\u00a0In essence, this\u00a0means pegging\u00a0interest rates below market clearing levels on the theory that more borrowing and spending will thereby ensue.<\/p>\n<p>To this traditional credit channel of monetary policy transmission has been added in recent years the\u00a0notion of an FX channel, which works through currency depreciation and export stimulus; and the wealth effects channel, which seeks to levitate the paper wealth of the top 10% of households so that they will feel emboldened to spend more at luxury retail\u00a0emporiums, BMW showrooms and upscale vacation spots.<\/p>\n<p>Needless to say, currency trashing might work for a tiny export economy like New Zealand. But on a global scale among the big national\u00a0economies, it\u2019s just a recipe for a race to the bottom. Ultimately it\u00a0leads to nothing more than\u00a0the inflation of imported commodities and\u00a0goods\u00a0and the reallocation of income and wealth from domestic industries and households to exporters and their shareholders.\u00a0 Japan proves that in spades.<\/p>\n<p>With respect to\u00a0the\u00a0false FX\u00a0channel, even Black Rock\u2019s chief big thinker, Peter\u00a0Fisher, hit the nail on the head last week on Bloomberg:<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Financial Time Bombs Hiding In Plain Sight The\u00a0bear\u00a0will soon be arriving\u00a0in earnest, marauding through\u00a0the canyons of Wall Street while\u00a0red in tooth and claw. Our\u00a0monetary central\u00a0planners, of course,\u00a0will\u00a0once again\u2014for the third time this century\u2014\u2014be utterly shocked and unprepared. That\u2019s because they have\u00a0spent the better part of two decades deforming, distorting, denuding and destroying what were once [&hellip;]<\/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":[124,5979,951,2120,2022,467,534],"class_list":["post-18133","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-contracorner","tag-currency","tag-david-stockman","tag-fx","tag-keynesian-economics","tag-monetary-policy"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18133","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=18133"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18133\/revisions"}],"predecessor-version":[{"id":18134,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18133\/revisions\/18134"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}