Labour govt 2020-23

[Logen Ninefingers]

The alternative is mass unemployment rather than full employment

The effects of an ordinary recession are often overstated, they are usually short and sharp and clear out malinvestment and reset asset prices. Giving the Reserve Bank here a dual mandate was pure folly.

Of course, you won't get a short sharp recession at the end of the sort of money printing and ultra-low interest rate policies that central banks have pursued since the GFC. I doubt you can hold back the tide no matter how much state intervention is done now, the situation is too far gone. I think the eventual crash will make the GFC look pretty tame by comparison. Intervention by the central banks in markets and through QE and interest rate suppression can never end well. Of course inflation will show up at some point, and once it does the game is virtually up. Of course you need to anticipate Black Swans. But they went down this road with no clear exit strategy and without considering Murphy's Law, and have ended up hopelessly trapped.

[Sir Ten]

Ayesha gives me very little confidence these monkeys are capable of anything other than picking fleas off each other and eating them.

[Panda-NZ-]

Of course, you won't get a short sharp recession at the end of the sort of money printing and ultra-low interest rate policies that central banks have pursued since the GFC. I doubt you can hold back the tide no matter how much state intervention is done now, the situation is too far gone. I think the eventual crash will make the GFC look pretty tame by comparison. Intervention by the central banks in markets and through QE and interest rate suppression can never end well. Of course inflation will show up at some point, and once it does the game is virtually up. Of course you need to anticipate Black Swans. But they went down this road with no clear exit strategy and without considering Murphy's Law, and have ended up hopelessly trapped.

It already has ended well, low unemployment and life savings protected.

Supply chain issues being resolved will help bring down the inflation.

[Logen Ninefingers]

It already has ended well, low unemployment and life savings protected.

Supply chain issues being resolved will help bring down the inflation.

You're in dream land mate, and I suspect many others are as well.

[ynot]

It already has ended well, low unemployment and life savings protected.

Supply chain issues being resolved will help bring down the inflation.

You have no idea. The music is about to stop.

[Panda-NZ-]

You're in dream land mate, and I suspect many others are as well.

That would be *still* shilling for a free market when it would have created two great depressions since 2008.

I prefer things which are safe, orderly and regulated.

[Logen Ninefingers]

You have no idea. The music is about to stop.

I think its probably already stopped in the US, what anyone is hearing now are the faint echo's like the light from some long dead star. They had the patient on life support since the GFC and kept pumping it full of the medicine that near killed it in the first place: debt and moral hazard. They added a couple of other experimental medicines, being QE and long-term interest rate suppression, and then inflation has come along and killed it. It's stone dead but they haven't broken the news to the citizenry yet. The markets have heard a rumour that the patient is dead and they have reacted accordingly. They still hope it can be revived. The rest of us will find out in the coming days and months.

[Logen Ninefingers]

That would be *still* shilling for a free market when it would have created two great depressions since 2008.

I prefer things which are safe, orderly and regulated.

If you think central banks allow for a free market, then you as just as deluded as the rest of them. In a free market you have price discovery and normalised interest rates, savers don't compete with the government as a source of capital for investment, your central banks don't interfere directly in the markets and they don't purchase 'assets' using funds created at the stroke of a computer keyboard. The balance sheet of the Federal Reserve is sitting at close to $9 Trillion at the moment, that is $9 Trillion in excess 'liquidity' that they have injected into the markets. Sorry, that isn't free market capitalism, that's about as interventionist as it gets.

[ynot]

I think its probably already stopped in the US, what anyone is hearing now are the faint echo's like the light from some long dead star. They had the patient on life support since the GFC and kept pumping it full of the medicine that near killed it in the first place: debt and moral hazard. They added a couple of other experimental medicines, being QE and long-term interest rate suppression, and then inflation has come along and killed it. It's stone dead but they haven't broken the news to the citizenry yet. The markets have heard a rumour that the patient is dead and they have reacted accordingly. They still hope it can be revived. The rest of us will find out in the coming days and months.

20+ Trillion and the well is ... dry ?

[Logen Ninefingers]

20+ Trillion and the well is ... dry ?

It's because of inflation. You can't keep pumping in liquidity and keeping interest rates close to zero when inflation is already running at 7%. So the Fed faces an impossible situation. If you withdraw the support mechanisms that keep the asset bubbles propped up and they'll collapse. If you don't do it, inflation runs rampant and you run the risk of hyperinflation. Moreover, it is politically untenable for the Fed not to actively fight inflation. Price stability is one half of their mandate in any case.