Here’s Why The “Impossible” Economic Collapse Is Unavoidable

Saturday, August 15, 2020
By Paul Martin

by Charles Hugh Smith via OfTwoMinds blog,
ZeroHedge.com
Sat, 08/15/2020

This is why denormalization is an extinction event for much of our high-cost, high-complexity, heavily regulated economy.

A collapse of major chunks of the economy is widely viewed as “impossible” because the federal government can borrow and spend unlimited amounts of money because the Federal Reserve can create unlimited amounts of money: the government borrows $1 trillion by selling $1 trillion in Treasury bonds, the Fed prints $1 trillion dollars to buy the bonds. Rinse and repeat to near-infinity.

With this cheery wind at their backs, conventional pundits are predicting super-rebounds in auto sales and other consumption as consumers weary of Covid-19 and anxious to blow their recent savings borrow and spend like no tomorrow.

As for the 30+ million unemployed–they don’t matter. Conventional analysts write them off because they weren’t big drivers of “growth” anyways–they didn’t have big, secure salaries and ample wealth/credit lines.

What this happy confidence in near-infinite money-printing and V-shaped spending orgies overlooks is what I’ve termed denormalization, an implosion of the Old Normal so complete that the expected minor adjustment to a New Normal is no longer possible.

The “New Normal” Is De-Normalization

The Rest…HERE

One Response to “Here’s Why The “Impossible” Economic Collapse Is Unavoidable”

  1. laura ann

    This makes voting utterly useless.

    #13299
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