Silver versus Debt, Delusions and Devaluation
Part One: THE ECONOMY – AND DEBT, DELUSIONS AND DEVALUATION
- Global retail sales are weak. “Redbook Retail Index confirms Commerce Department December Retail Collapse.”
- Falling Imports into the U.S.
- Industrial Production dives lower
- Tariff war with China. Does a tariff war benefit anyone?
“Qualified buyers don’t want to borrow more.”
“Lenders are faced with a lose-lose choice: either stop lending to unqualified borrowers and speculators, and lose the loan-origination fees, or issue the loans and take the immense losses when the punters and gamblers default.”
- Student loan defaults hit an all-time high.
- The Baltic Dry Index fell to its lowest level in three years.
The Fed backpedaled on interest rate hikes and balance sheet reductions. QE, a short-term emergency burst of monetization, now looks like a permanent fixture in the Fed’s bag of tools that devalues the dollar and transfers wealth to the financial and political elite.
Increasing debt, delusional thinking and devaluation – no surprises here.
ACCORDING TO SOME, THE ANSWER TO OUR ECONOMIC PROBLEMS, EXCESS DEBT AND INSUFFICIENT GOVERNMENT SPENDING… is MMT. (Like central banking, it’s nonsense, but popular.)
MMT = Modern Monetary Theory, or as Zerohedge calls it, Magic Money Tree economics.
“MMT basically creates money out of thin air. If that’s possible, governments can pay for everything.”
“We just pay for things by printing money. Then we make debt go away.”
Easy! If it looks too good to be true… watch out for unintended consequences like hyper-inflation.
Previous experiments with MMT failed, but MMT advocates claim this time will be different. I doubt it.
Economic uncertainty is rising.