re: Hussman's Intervention:yes. Liquidity:no
I'm not an economist and you'd couldn't pay me enough
money to play one on TV. There are those who agree
with Hussman, and others who disagree with him.
Put 12 economists in the same room, with the same
numbers, and you'll get 12 different takes on reality.
Pick your poison...
M1, M2, M3, MZM... we could argue endlessly over which
"M" we should use in discussing money supply.
The bottom line is that money supply is being grown at
over double digit rates by 17 of the 20 largest
central banks.
Fundamentally, I believe that inflation is always,
and everywhere... a monetary phenomenon.
First, economists and central bankers convinced us that
debt money and fractional reserve banking was good and
that we didn't need a gold, or silver backed currency.
Recently, they've tried to convince us that inflation
is presently running at 2.3%.
And now you & Hussman want me to believe that Fiat Central
Bankers are fixing a liquidity crisis in the financial
markets - by NOT adding liquidity - but, by actually
withdrawing it?
...I don't think so.
And neither do gold, oil, currency, bond, or equity markets
-- think so.
Hussman addressed the Fed's masterfull use of mis-direction.
In his defense, there's a lot of central banks, doing a lot
of 3-card monte repos and rollovers.
In my humble opinion... Hussman just got mis-directed.
Liquidity comes in many forms, and we could argue
endlessly what the definition of liquidity is.
It can come from printing money, or from creating credit.
Does the BOJ's policy of near zero interest rates
and a manipulated Yen not add liqidity?
...only about a trillion dollars leveraged into global
equities and commodities via the Yen-carry trade.
Central Bankers have created one bubble after
another with reckless money and credit creation.
They have NOT found Jesus in regards to inflation.
They are NOT printing less money.
They are NOT reigning in credit.
They are NOT addressing the out of control global
derivatives bubble.
Of all that - I am very sure.
But, what I am "most" sure of - is this:
That they are most definitely NOT withdrawing liquidity
from the global financial markets - in order to "fix"
a global liquidity crisis.
Of that - I am most sure.
And if you don't believe me - just ask gold.
S.O.T.B. |
