{"id":19808,"date":"2016-04-11T17:08:56","date_gmt":"2016-04-11T22:08:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=19808"},"modified":"2016-04-11T17:08:56","modified_gmt":"2016-04-11T22:08:56","slug":"a-fatal-flaw-in-the-system","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=19808","title":{"rendered":"A Fatal Flaw in the System"},"content":{"rendered":"<div class=\"art-postmetadataheader\">\n<h3 class=\"art-postheader\"><a title=\"Permanent Link to A Fatal Flaw in the System\" href=\"http:\/\/www.acting-man.com\/?p=44259\" rel=\"bookmark\">A Fatal Flaw in the System\u00a0<\/a><\/h3>\n<\/div>\n<div class=\"art-postheadericons art-metadata-icons\"><strong>The Hard Rocks of Real Life<\/strong><\/div>\n<div class=\"art-postcontent\">\n<p>BALTIMORE \u2013 The Dow dropped 174 points on Thursday, the biggest fall in six weeks. Not the end of the world. Maybe not even the end of this year\u2019s bounce-back bull run. As you\u2019ll recall, stocks sold off at the beginning of the year, too. Then, investors were buoyed up after central banks got to work \u2013 jimmying the credit market on their behalf.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-44264\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/5o1rhrdw59wk-1024x678.jpg\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" srcset=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/5o1rhrdw59wk-300x199.jpg 300x, http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/5o1rhrdw59wk-768x509.jpg 768x, http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/5o1rhrdw59wk-1024x678.jpg 1024x\" alt=\"5o1rhrdw59wk\" width=\"640\" height=\"424\" \/>Photo credit: Andrei Shumskiy<\/p>\n<p>The Fed swore off any further \u201cnormalization\u201d until later in the year. Central banks in Europe, Japan, and China all took bolder and more reckless action\u2026 with the Bank of Japan following some European banks by going into \u201cfull retard\u201d mode with negative interest rates.<\/p>\n<p><a href=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/1-DJIA-10-minute-chart.png\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-44260\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/1-DJIA-10-minute-chart.png\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" srcset=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/1-DJIA-10-minute-chart-300x133.png 300x, http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/1-DJIA-10-minute-chart-768x340.png 768x, http:\/\/www.acting-man.com\/blog\/media\/2016\/04\/1-DJIA-10-minute-chart.png 990x\" alt=\"1-DJIA-10-minute chart\" width=\"640\" height=\"283\" \/><\/a>DJIA, 10-minute candles; the red rectangle bounds Thursday\u2019s market action. A rebound attempt on Friday failed to go very far \u2013 click to enlarge.<\/p>\n<p>Now, according to the narrative popular in the financial press, investors are beginning to worry that central banks are not very effective after all. As to that last point, they\u2019re right; central banks can only do so much. They made the situation what it is. Now, they can only make it worse. How? By adding more of what made it bad in the first place. All they can do is add more debt to a world already drowning in it.<\/p>\n<p>If anyone knows of a different way this story might unfold, we\u2019d like to hear it. But for all the puzzling and preposterous guesswork and wondering, it is still the same tale: Debt builds up; debtors can\u2019t pay; they go broke. It happens all the time.<\/p>\n<p>In a healthy economy \u2013 with real money and honest banking \u2013 people make mistakes. They go broke. The bankruptcies are absorbed and disposed of in good order. Assets go on the block. Hungry investors and entrepreneurs snap them up\u2026 and put them to good use.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A Fatal Flaw in the System\u00a0 The Hard Rocks of Real Life BALTIMORE \u2013 The Dow dropped 174 points on Thursday, the biggest fall in six weeks. Not the end of the world. Maybe not even the end of this year\u2019s bounce-back bull run. As you\u2019ll recall, stocks sold off at the beginning of the [&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":[5728,6190,216,5206,13413,1138],"class_list":["post-19808","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-bill-bonner","tag-dow","tag-economic-system","tag-flaws","tag-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19808","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=19808"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19808\/revisions"}],"predecessor-version":[{"id":19809,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19808\/revisions\/19809"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}