Inflate! Spend! Print!

2020-06-17

Inflate! Spend! Print!

More jobs. More GDP. More sales. More profits. More spending. More income. More output.

Klippt från tidigare utgåva av Göran Högbergs finanskrönika.

The Coronavirus is very much under control in the USA.
– Donald J. Trump, Feb. 2020

The subprime problem is contained.
– Ben Bernanke, former Federal Reserve chairman, March 2007

Economists can’t tell “better” from a hole in the ground, so their professional guidance is directed only at quantity.

More is the preferred adjective. More jobs. More GDP. More sales. More profits. More spending. More income. More output.

Then, they pretend that “more” is the same as “better.”

According to the news reports, Donald Trump is “furious” with the stock market. He, too, very much wants more… not less.

Surely, the call is going out from the White House already: Do something!

We recall 1969. The economy was only one-twentieth of today’s GDP. But was the quality of life inferior? In any event, we don’t remember feeling less happy… even with the Hong Kong flu! (Bill Bonner)

But the feds don’t care about happiness. Their economists have no way of measuring it; they wouldn’t recognize it if it bit them on the derriere.

All they know is that less is not acceptable. They want more.

Which is where our opportunity lies. The feds stand ready. If the stock market continues to fall today… if the economy weakens further… if the virus spreads in the U.S… even if aliens land from outer space…

…what will they do?

Inflate! Spend! Print!

Whether this will halt the stock market correction, we don’t know.

But it’s a fair bet that something will go up – gold. (Bill B)

Anyway, valuations bear markets are the dark side of the wave… the winter… the reset… the detox… and they mean lean pickings for investors, generally.

Typically, you get four to six recessions in a completed valuations bear market. We’ve had two already in this one, so I’m expecting a few more.

The last one was over 10 years ago, and I see some big imbalances building up again, so I’m expecting the next one to come along soon. (Recessions are like buses. One doesn’t come for ages and then three come along at the same time.)

Ludwig von Mises explains how the weakened state of German liberalism left the door open to German socialism which paved the way for Nazi ideology.

Because banks make unbacked "loans," they create new money that later disappears when repaid. If these loans are not renewed, economic depression sets in.

As the lawyers say, if it looks like a duck, if it waddles like a duck… and it quacks like a duck… dammit… it is a duck.

You've probably heard that Bernie Sanders was at pains the other day to emphasize that Fidel Castro wasn't all bad.

For one thing: nearly all regimes, no matter how foul, can point to at least some accomplishment. With all those resources seized from the private sector they're obviously going to have something to show for themselves.

Economics today poses as a predictive discipline which fails to correctly predict anything; a prescriptive discipline which prescribes the wrong policies, and an empirical discipline which collects data but misses the point.

Göran Högberg

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