Reassurance? We'd be more reassured if we saw the pilot and co-pilot both bailing out.
But they're determined to keep flying... until the wings come off.
Lest you think the Fed is doing some kind of public service...like delivering the mail to far outposts in Alaska...you should realize that they're delivering money...cash...to their friends and business partners. RT reports:
Even with all that new money filling the bankers' pockets, apparently it ain't enough. Again, Bloomberg is on the story:
What's wrong with these Nobel Prize winners, anyway? Does the award cause brain damage? Inquiring minds want to know.
Take Paul Krugman...please!
And here comes Joseph Stiglitz. He's got a new book out. Here's an extract:
Here, at least he is on more solid ground:
The poor man seems to have no interest in how those incentives came to be. A dear reader might want to pass this along to him:
Wall Street's perverse incentives...inequality...and the financial markets' recent extreme instability all have the same source — the feds. Their ersatz money led to an extreme increase in the amount of credit. Total credit in the US rose 50 times in the last 50 years.
Wall Street had an incentive to peddle credit to everyone — even those who couldn't pay back their loans.
Wall Street makes money by dishing out credit...the more they dispense, the more they make. A disproportionate amount of this new credit goes to their customers, their clients, and their cronies — that is, to the 'rich.' That's why the rich are so rich. Because their financial assets went up in price faster than consumer prices or labor rates (both held down by outsourcing to emerging markets).
As for instability, what do you expect when you have a monetary system that allows credit to expand many times faster than the real economy? And what happens to an economy when money itself can't be trusted? Try this experiment; let carpenters build your next house with an elastic tape measure...or let pilots fly planes with whacky instruments...or set the escalator at the shopping mall to go faster and faster. You'll see plenty of accidents there too.
What is wrong with Stiglitz? Markets soar when the Fed hints at more money...and crash when it hints that it will sit still. And Stiglitz blames the markets for instability! When you operate with an elastic currency...and you expand credit 50 times in 50 years...you have to assume that the financial world will get a little 'toppy.' Then, when it falls over, he seizes the opportunity to tell us that markets need to be controlled by the same people who gave us the credit bubble:
for The Daily Reckoning
June 21, 2012
Posted by Naxal Watch at 1:17 AM