So, everyone knows that the economies around the world are slowing. Are we currently in a recession? I say yes, this second quarter will be the official start, but you won’t know it officially for six or more months.
Yet, through it all, the Fed Heads and the ECB Members talk about pending Monetary Accommodation if necessary. What does that mean? That the FED will by more bonds, perhaps Mortgage paper.
HOW DOES THAT HELP THE ECONOMY? Does it make housing more attractive. Not a chance.
It helps only the holders of the shitty mortgage paper. And who might that be? Why the fucked up, LIBOR-lying, cheating, fraudulent Banks, of course. Plus it makes sure the Government gets the month to month funding it needs to function.
And that Monetary accommodation will NEVER leak into the real economy. It cannot because it would create real dollar debasement and runaway inflation, a la the Wiemar Republic, and that can never be allowed to happen. And the FED can do this whenever it wants and for whatever amount it sees fit.
So the markets continue to muddle through without much movement outside the trading range. It’s going to be a long summer.
4 Responses to Monetary Accommodation Helps Only Banks & Government
i just dont know how much more,”we the people” can take anymore. a seam has to burst,somewhere.
NEVER. It wil go on FOREVER. (BTW, never use either “never” or “forever” in investment lingo)
I will forever keep that in mind and never forget it while investing.
Central banks inflating asset values bails out every pension plan on the planet. How many company’s would be facing unfunded pension liabilities if not for higher equity and commodity markets? That definitely helps the real economy right now.