Saturday, August 28, 2010
A Real WYO Dog and Pony Show
I haven't been able to get a comprehensive guest list and of course no bloggers were invited. I assume my old Richmond buddy Kartik Athreya made sure of that:http://cal48koho.blogspot.com/2010/08/kartik-athreya.html.
http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691142165/ref=sr_1_1?ie=UTF8&s=books&qid=1283036244&sr=8-1 which analysed financial collapses over the past few centuries. Neoclassical clowns never look through the retrospectascope of history or even consider the possibility that it might be different this time. I doubt if Ben read has it. If he had, he would be having second thoughts about more stimulus like QE(money printing), peddling and trading mortgage securities for Treasuries, changing reserve requirements, fiddling with interest rates and so forth. Ben needs to look over the edge . If he did he would see that he is looking into a veritable Black Hole which has sucked into its maw all his bright ideas and trillions dumped into Wall street banks and all the other bullets from his six shooter. Ben says he has more bright ideas like buying long dated treasuries now that our old pals like China and Japan aren't.How that will restore growth to a country and a banking system that is bankrupt is beyond me. The American people are way ahead of the Federal and State governments. They piled up huge debts and are now not borrowing and not spending. They are paying down debt and saving. The national savings rate is up to 6% from negative percent a few years ago.Outstanding credit card debt is dropping. They are doing the only sensible thing. It may not be austerity but it is the next best thing. The American family has the massive advantage of far less complexity and not having economists advising them what to do. This is precisely what Mr Trichet told the Symposium but who knows if Ben and the Feddies were listening. If you always do what you've always done, if you always think how you've always thought, then you'll always get what you've always gotten. We are in a depression now and talking bobble heads never tire of asking : Is this a recession or a double dip recession? I say paraphrasing Gertrude Stein: this ain't no recession, there ain't gonna be a recession, there never has been a recession, that's your answer.