QE; the Beat Goes On

The BoE, in battling the fallout from Brexit (a decelerating economy), has dropped rates to .25%.  Bond markets cheer, with US yields dropping (bonds up) and global bonds rising.  From Investing.com

bonds

There is talk of QE, lower bounds and supposed policy limitations.  But what it is is just one mole in the global game of Whack-a-Mole, popping its head up.

whackamole

Here in the US, we have trickier moles, pretending to be deciding when will be the right time to raise interest rates in line with employment growth and a relatively decent economy (and financial markets at all time highs).  But at every FOMC meeting (save for one symbolic gesture many months ago) this one pops up, does nothing and gets back under ground before we can smash its head.  This time claiming that inflation is not high enough.  It is sad that people are expected to believe this is anything approaching normal.

Speaking of sad, here is Keynesian Bloomberg columnist and former Minneapolis Fed president Narayana Kocherlakota agitating for simply giving US households $10,000 each, along with some ‘make work’ initiatives like the omnipresent “roads and bridges”.

US Can and Should Boost Growth

You can read the article by this dyed in the wool Keynesian idealist.  All we ever had to do was ask the government to boost growth!  Stupid us.

He talks about falling inflation adjusted incomes from 2000 to 2016 seemingly without a clue that the inflation to date is a big part of the reason why.  You can read it yourself as I’ll not do one of my wise guy point-by-point critiques (reserving those for biiwii).  But these guys have their heads so far up their intellectual behinds they cannot see the simplest of concepts; like the less zero sum game inflation ultimately is with a side effect of redistributing what wealth there is to the rich on a massive scale.

The bottom line is desperation and inflation creation as economic underpinning.  The US mole is playing the game with the rest of the developed world.  It is just doing so from a currently more comfortable vantage point.  This is the product of a monetary system of debt-for-growth and it is an all in, one-way situation.

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