{"id":7254,"date":"2015-04-12T07:51:22","date_gmt":"2015-04-12T12:51:22","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7254"},"modified":"2015-04-12T07:51:22","modified_gmt":"2015-04-12T12:51:22","slug":"none-dare-call-it-fraud-its-just-a-savings-glut","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7254","title":{"rendered":"None Dare Call It Fraud\u2014\u2013Its Just A \u201cSavings Glut\u201d"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/davidstockmanscontracorner.com\/none-dare-call-it-fraud\/\" target=\"_blank\">None Dare Call It Fraud\u2014\u2013Its Just A \u201cSavings Glut\u201d<\/a><\/h3>\n<p>They were jawing again this morning about the low\u00a0\u201cnatural rate\u201d of interest on bubble vision, implying that the workers of the world have succumbed to an atavistic fit of\u00a0wild-eyed thrift.\u00a0Gosh, the world is so inundated in a\u00a0savings glut, averred\u00a0Wall Street economist\u00a0Ed McKeon,\u00a0that the interest rate would be near zero\u2014\u2013even without the concerted action of the central banks.<\/p>\n<p>Hogwash! Since the turn of the century the major central banks have purchased upwards of\u00a0$15 trillion worth of government bonds and other fixed income assets. Yes, these reckless money printers have suspended common sense,\u00a0<em><strong>but they have not repealed the law of supply and demand, nor even suspended its relentless operation for a nanosecond.<\/strong><\/em><\/p>\n<p>So in adding massively to \u201cdemand\u201d for something that sells at a price (the interest rate), the big fat bid of the central banks has caused\u00a0fixed income\u00a0markets to clear\u00a0at much higher prices (lower yields)\u00a0than would otherwise\u00a0be the case. That\u2019s just economics 101.<\/p>\n<p>By contrast, were\u00a0the\u00a0market dependent solely\u00a0upon the savings of\u00a0America\u2019s hand-to-mouth middle class,\u00a0Europe\u2019s legions of socialist pensioners, Japan\u2019s mushrooming retirement colony or the millions of former peasant girls who labor for comparatively meager in Foxcon\u2019s sweatshops, one thing\u00a0would be\u00a0certain: There\u00a0would not\u00a0be trillions of government bonds trading at negative nominal\u00a0interest rates this very moment, or tens of trillions trading close to the zero bound and therefore at negative rates after inflation and taxes.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>None Dare Call It Fraud\u2014\u2013Its Just A \u201cSavings Glut\u201d They were jawing again this morning about the low\u00a0\u201cnatural rate\u201d of interest on bubble vision, implying that the workers of the world have succumbed to an atavistic fit of\u00a0wild-eyed thrift.\u00a0Gosh, the world is so inundated in a\u00a0savings glut, averred\u00a0Wall Street economist\u00a0Ed McKeon,\u00a0that the interest rate would [&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":[124,303,305,950,661,662,702,4742],"class_list":["post-7254","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-fed","tag-federal-reserve","tag-fraud","tag-qe","tag-quantitative-easing","tag-savings","tag-savings-glut"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7254","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=7254"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7254\/revisions"}],"predecessor-version":[{"id":7255,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7254\/revisions\/7255"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7254"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7254"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7254"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}