Pretty learned and thoughtful speech from a Master Sargeant!
I think I understand his point, but what "they" are trying to do is not liquidate capital (hell, the bear is doing a GREAT job of that, all by his bad self!<G>) but trying to destroy excess capacity which has been killing pricing power, margin and profitability. And no one wants to let it happen the "natural" way (ie, quit printing up a bunch of money, quit rolling over bad loans, allow the credit bubble to resolve, allow the banks to take their lumps and a buncha companies to go outta business, and unemployment to rise). So yeah, in that environment the war IS against the stagnant economy, to bail out bankers, to massively increase government spending and to avoid having the markets clear. This will look good for awhile (much like BubbleBoy cutting rates 700 basis points did), but we'll end up in the same place, mainly because this particular battle will be so one sided (fortunately) that nothing much materially will be destroyed or consumed that will matter. Hardly like B-17's and Lancasters bombing the bejeezus outta Tokyo, Franfurt, Schweinfurt and Munich. Nor will we see WWI scale casualties, to remove millions of young men from the work force (thankfully). So this particular war will fail miserably in the economic sense of "pulling us out of our deflationary abyss", even if other objectives are easily achieved. The bankers are still gonna fry, sooner or later, the piper WILL be paid (as the Japanese are ever-so-slowly learning). |
