A Quote by Charles Hugh Smith
The problems of the global economy are not based in perception, but in the reality of prices, balance sheets and income statements, vast concentrations of wealth and power, precarious systemic imbalances, ruthless exploitation, and command economies mismanaged by Central State/Bank policy and manipulation.
Related Quotes
Global central banks are working hard to lift their economies through an aggressively easy monetary policy. The ECB [European Central Bank] and BOJ [Bank of Japan] are buying tens of billions of bonds and other financial securities each month in an effort to stimulate their economies, which is pushing down rates everywhere, including in the U.S.
The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.
In the words of Louis Brandeis, the Supreme Court justice, we have a choice between a democracy or vast concentrations of wealth. We have vast concentrations of wealth which has bought its way into our democracy with its political leaders who exemplify the merger of that economic and political elite.
In a mature economy like India's, which is becoming modern and a financially-oriented economy, an independent central bank, responsible central bank, is really central to success.
The fiat-based system has produced enormous global imbalances that are straining the global economy. Ultimately, I think the whole thing gives way and what returns is what existed prior to the dollar standard, and that is a global gold standard, which is the only thing that really works.
Now, McDonald's is a very good indicator of the global economy. If McDonald's doesn't increase its sales, it tells you that the monetary policies have largely failed in the sense that prices are going up more than disposable income, and so people have less purchasing power.
The problems of 2008 were never cured. The Federal Reserve's solution to the crisis was to lend the economy enough money to borrow its way out of debt. It thought that if it could subsidize banks lending homeowners enough money to buy houses from people who are defaulting, then the bank balance sheets would end up okay.
There is no such thing as agflation. Rising commodity prices, or increases in any prices, do not cause inflation. Inflation is what causes prices to rise. Of course, in market economies, prices for individual goods and services rise and fall based on changes in supply and demand, but it is only through inflation that prices rise in aggregate.
Part of the reason we're all committed to coordinated stimulus is we want to stimulate the global economy. We're in a global economy, not just our national economies.p
The crusade to convince us that global warming can only be dealt with by wealth destruction and higher energy prices began with an effort to 'raise awareness,' which turned into some delicate nanny-state prodding before efforts to artificially inflate prices.
It is the central bank governor, unlike other regulators or government secretaries, who has command over significant policy levers and has to occasionally disagree with the most powerful people in the country.
My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.
Our view is that economic isolationism is the wrong way to go. Vibrant, successful growing economies that advance the interests of their citizens engage the global economy. And, we're committed to engaging the global economy.
Market values are fixed only in part by balance sheets and income statements; much more by the hopes and fears of humanity; by greed, ambition, acts of God, invention, financial stress and strain, weather, discovery, fashion and numberless other causes impossible to be listed without omission.
If the public understands the central bank's views on the economy and monetary policy, then households and businesses will take those views into account in making their spending and investment plans; policy will be more effective as a result.
Engineers, medical people, scientific people, have an obsession with solving the problems of reality, when actually ... once you reach a basic level of wealth in society, most problems are actually problems of perception.
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