Tyranny Of The PhDs…” the emerging stock market slump isn’t just another cyclical correction; it’s the opening phase of the end-game.”
by David Stockman
DavidStockmansContracorner.com
June 13, 2016
Sad to say, you haven’t seen nothin’ yet. The world is drifting into financial entropy, and it is going to get steadily worse. That’s because the emerging stock market slump isn’t just another cyclical correction; it’s the opening phase of the end-game.
That is, the end game of the PhD Tyranny.
During the last two decades the major central banks of the world have been colonized lock, stock and barrel by Keynesian crackpots. These academic scribblers and power-hungry apparatchiks have now pushed interest rate repression, massive monetization (QE) and relentless rigging of the financial markets to the limits of sanity and beyond. Honest, market-driven price discovery is dead as a doornail.
No more proof is needed than the “matrix” below. The very thing that financial history proves, above all else, is that governments can’t be trusted to honor their debts. And that cardinal fact is supposed to be embodied in the yield.
In fact, modern welfare state democracies have a veritable fiscal death wish.
What else can you call Japan’s announcement to defer yet again an increase in the consumption tax? Its public debt is already at 240% of GDP, even as its tax-paying population is rapidly streaming toward it’s national old age home.
At a 135% debt-to-GDP ratio, Italy is not far behind. It’s economy is still smaller than it was in 2007, its banking system has more than $200 billion of bad debt, its public sector squanders more than 50% of GDP and its politically fractured and corruption-ridden government is paralyzed.
Yet these are only advanced cases of the universal fiscal condition of the world’s sovereigns. With $80 trillion of public debt and unfunded entitlement liabilities, the US government is hardly more solvent than the socialist basket cases of Europe.
The Rest…HERE
