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Western economies: A tale of thieves and tapers   [Copy link] 中文

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Post time 2014-1-6 08:01:12 |Display all floors
Patrick L Young

2013 was the year where the threat of removing the QE punchbowl provoked market panic, while the EU was instrumental in sinister programs of theft above and beyond even the rapacious 'Central Bankers’ party'...

                                  We began 2013 with the euro crisis yet to be cured, and indeed as  we end the year it remains the fiscal elephant in the room. A  volcano apparently dormant but clearly still active beneath the  crater. Quite when it will next erupt nobody knows, but even  Christine Lagarde of the IMF was keen during December to remind  us that the crisis was far from resolved.


  However, 2013 was the year where certain governments continued to  be immolated on a symbolic funeral pyre as euro authorities  sought to keep the flawed single currency alive  at any price. Bank customers in Cyprus,  ranging from Russian companies, through a significant quantity of  the companies quoted on the Warsaw Stock Exchange and many  individuals across the world found their assets appropriated.  Rather than burn bondholders and others holding risk capital  (Germany protected its bankers as they did in Ireland and  elsewhere), the depositors found their deposits being stolen. The  theft axis was one which carried on throughout the year. In an  audacious deployment of arcane EU accounting rules previously  exploited by Hungary, the Polish government de facto confiscated  over half the nation’s private pension funds in an attempt to  make up for their inadequate fiscal management.

  Ultimately, most global citizens ended the year with their  pockets having been picked in some way by rapacious governments,  albeit through stealthy means... The daft policy of Quantitative  Easing continued apace. In the vanguard remained the Federal  Reserve handing bankers a cool 85 billion dollars every month to  perpetuate the largely bankrupt system. During 2013, the US alone  every month spent twice the annual GDP of Serbia in a balance  sheet shuffle which a non-economist might prosaically term a  confidence trick.


  Even some traditional congressional spendthrifts have realised  they can’t maintain this suicidal ‘rob Peter to pay  bankers’ policy. Thus the second half of 2013 was spent  obsessing about the ultimate financial terror (aside from the  bankers’ previous hegemony). Outgoing Fed Chairman Ben Bernanke  plotted a way out of the ‘crazynomics’ created by the ill-considered QE  policy knee jerk after the credit crunch.


  At first mention of a taper, markets panicked and, just like  2008, politicians lost their nerve. The taper was hastily  postponed while the Fed endeavoured to counsel the markets to  avoid what remains a case of Stockholm syndrome between banks and  government. Ben Bernanke’s parting retirement gesture has been to  taper by a rather derisory 10 billion dollars per month in the  New Year.


  For those lost in the arcane minutiae of quantitative easing (who  isn’t?), it remains true that government oversaw a crazy party  during the last decade where politicians maintained a delusion  that they could inflate property markets with impunity. Banks  joined the party and the result was chaos when inevitably the  boom cycle led to bust. Sadly the party has long ended in the  real economy but the bankers are being lubricated by a central  banker punchbowl which the Fed is trying to gradually siphon out  of the bar.

  However, the damage has already been done and hence the terror of  theft mentioned earlier will likely soon become post taper  terror. Western politicians of left and right have successfully  created a dangerous whirlpool of QE debt which has fed massive  asset inflation - from fine art to classic cars through all  manner of investment markets.


  A day of QE reckoning is coming and the mood on the streets is  understandably angry as normal business has been left behind in  the bizarre escalation of a central bank spending spree which has  only proven the ultimate impotence of government to create  tangible wealth. Ironically it is the very banking elite the G20  pledged to curtail (Pittsburgh 2009) which have profited as  everybody else has felt their wealth reduced through higher  taxes, lower savings rates and the colossal failure of this  unprecedented government interventionist phase to actually  deliver any benefits to the economy at large. At least one could  argue that some governments have finally succeeded with  redistribution of wealth - problem is the people have paid to  keep bankers and the absolute richest on their pedestals.


  Sooner or later the taper will give way to terror and an  incredible rebalancing will begin. However 2013 was dominated by  what amounts to tawdry theft.


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Post time 2014-1-6 08:07:48 |Display all floors
You think a greedy hyena has the right balance?






I've made my living, Mr. Thompson, in large part as a gambler. Some days I make twenty bets, some days I make none. There are weeks, sometimes months, in fact, when I don't make any bet at all because ...

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Post time 2014-1-7 06:11:27 |Display all floors
Revolutionar Post time: 2014-1-6 08:07
You think a greedy hyena has the right balance?

No
Stan, you're holding a gun to God's head. I can't think of a metaphor that's better than this.

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Post time 2014-1-7 11:28:26 |Display all floors
The social security fund has been raided in the USA to the tune of about 6 or 7 trillion dollars so our
rich can get even richer. We wage slaves get no respect. Maybe the obscenely rich owners of the
USA will start herding the lowest 10% onto reservations like they herded the Native Americans
onto reservations in the 1800s.
After all, that's the philosophy of one of the most vile criminals of capitalism, Jack Welsh.
Fire the lowest performing 10% every year. I wonder how long it will take the rich to figure out
that nothing gets done without their wage slaves... I wonder how much longer it will be before
the wage slaves revolt...
It's a good thing I'm paying my wife's Chinese social security payment every year.
That's all we might end up with in our old age.
If capitalism promotes innovation and creativity then why aren't scientists and artists the richest people in a capitalist nation?

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Post time 2014-1-7 11:31:16 |Display all floors
robert237 Post time: 2014-1-7 11:28
The social security fund has been raided in the USA to the tune of about 6 or 7 trillion dollars so  ...

If you think you can live in China on her social security payment you are nuts.

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Post time 2014-1-7 11:33:15 |Display all floors
grb Post time: 2014-1-6 19:31
If you think you can live in China on her social security payment you are nuts.

Not nuts. She owns her own condo. Does grb need his toys to survive?
If capitalism promotes innovation and creativity then why aren't scientists and artists the richest people in a capitalist nation?

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Post time 2014-1-7 11:58:56 |Display all floors
robert237 Post time: 2014-1-7 11:33
Not nuts. She owns her own condo. Does grb need his toys to survive?

They are not called condos in China, you idiot.  And I guess one of you do not plan to eat?

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