{"id":18935,"date":"2016-03-16T18:30:38","date_gmt":"2016-03-16T23:30:38","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18935"},"modified":"2016-03-16T18:30:38","modified_gmt":"2016-03-16T23:30:38","slug":"we-need-the-pain-that-comes-with-more-saving","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18935","title":{"rendered":"We Need the Pain that Comes with More Saving"},"content":{"rendered":"

We Need the Pain that Comes with More Saving\u00a0<\/a>\"We<\/h3>\n
<\/section>\n
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The endgame of monetary side manipulations is upon us. Since 2008, central banks have done what they thought was needed to bring the markets back from the pain they experienced during the crash. The problem, of course, is that these Keynesians and Monetarists placed the high level of stock markets as the goal of \u201cpolicy\u201d and confused booming asset levels with economic growth.<\/p>\n

The enemy of prosperity, in the eyes of global economic policymakers, is the desire of the consumer to save and\u00a0 businesses to refrain \u2014 even in the short term \u2014 from investment. As such, their \u201csolution\u201d was the very poison that has infected the Western world over the decades: more credit, lower costs of money, more push for \u201cconsumer demand.\u201d<\/p>\n

The Current Orthodoxy Is Failing<\/strong><\/p>\n

But \u201ceasy\u201d monetary policy has merely led to debt-ridden economies and a bubble that is increasingly being exposed as a complete farce. January saw a market pullback tease that reminded investors that what was pushed up artificially can\u2019t be sustained forever. Monetary policy, even if it goes to negative interest rate territory with a vengeance, isn\u2019t going to be the miracle drug needed to provide a better economic foundation. Austrians have long known this. The mainstream is\u00a0just starting to publicly admit it<\/a>.<\/p>\n

The Savings-Glut Myth<\/strong><\/p>\n

However, the right lessons are not being learned by either the economic policymakers or the financial pundits. In fact, the most dangerous economic fallacies still underlie their entire financial worldview. For instance, there is the ever-constant theme that there is a \u201cglut of savings\u201d and that low consumer demand is the chief villain that stands opposed to economic stabilization. Martin Wolf, writes in\u00a0The Financial Times<\/em>:<\/p>\n

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

We Need the Pain that Comes with More Saving\u00a0 The endgame of monetary side manipulations is upon us. Since 2008, central banks have done what they thought was needed to bring the markets back from the pain they experienced during the crash. The problem, of course, is that these Keynesians and Monetarists placed the high […]<\/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":[61,89,240,303,305,11959,467,7617,11866,534,536,702,1615],"class_list":["post-18935","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking","tag-boom-and-bust","tag-economic-growth","tag-fed","tag-federal-reserve","tag-jay-engel","tag-keynesian-economics","tag-mises-institute","tag-monetarism","tag-monetary-policy","tag-money","tag-savings","tag-spending"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18935","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=18935"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18935\/revisions"}],"predecessor-version":[{"id":18936,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18935\/revisions\/18936"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}