Musical Chairs, Hand Grenade Version…”Central banks around the world entered the Mad Hatter stage of our visit to Wonderland with the direct debasement of the value of their sovereign debts via Quantitative Easing.”
James Quinn
TheBurningPlatform.com
21st November 2014
With stocks in Moon Launch Mode after China’s central bank “surprised” everyone by promising to turn more debt into wealth with the wave of a magic wand, it’s time to review what apparently very few people see.
Most of the time, when someone issues an IOU the only reason it is accepted is that the person agreeing to hold it believes he’s get paid. This is obvious.
Once in a great while, the masses of men become so self-assured and giddy with the fruits of their innovative brethren that they embrace notions that are completely inconsistent with reason. Never has this been more true that now, when “everyone” agrees that, for instance, a firm that produces barely me-too but extremely fashionable electronic gadgets should be the most valuable business on Planet Earth.
All of this is quite obviously a late-stage development of the collectivist political philosophies of the last 150 years. For that entire time, one philosopher after another celebrated the omnipotence of the central political state and its administrators’ ability to move mankind toward Utopia. This is true of Progressivism as much as it is of communism, national socialism and Fabian socialism.
Today, the consensus view is that no matter how much value in IOU’s is issued by any sovereign political system in the world (Japan, China, the US, the EU….), those IOU’s are as good as gold because those political entities can either tax enough to cover the coupon forever or, in extreme but frankly unimaginable circumstances, they can simply issue trillion dollar (or quadrillion yen) coins and pay off the debts, voila, and simply go on with business as usual.
This consensus remains no matter how many reports are issued detailing the parabolic rise in per-capita debt burdens and endless hand-wringing. The continuation of parabolic growth in IOU’s is itself cited as proof positive that no matter how absurd the process becomes, it is permanent. If Japan’s Abenomics is not an open representation of this belief, then what could be?
Central banks around the world entered the Mad Hatter stage of our visit to Wonderland with the direct debasement of the value of their sovereign debts via Quantitative Easing. Clearly, the success so far of creating credit from nowhere, then allowing sovereign countries to issue debt to access that credit without causing so much as a ripple in the capital value of both the newly minted IOU’s and the ocean of previously existing IOU’s, has emboldened the Cargo Cultists running the world’s countries in their belief that exponents can be ignored.
The Rest…HERE
