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Friday, March 09, 2012 5:31:13 AM
OfTwoMinds<>Our "Let's Pretend" Economy: Let's Pretend Financialization Hasn't Killed the Economy
Thursday, March 08, 2012
Like the bubonic plague, financialization has a lifecycle that cannot be reversed by Federal Reserve or European Central Bank intervention.
Let's pretend the Federal Reserve can force the financialization lifecycle back into expansion. Why do we need to pretend this can happen? Because the entire U.S. economy and its expansionist Central State now depends on ever-expanding financialization for its survival.
Financialization is like the bubonic plague--it constantly needs new victims as it kills off its existing hosts. Housing? Dead, killed by financialization, aided, abetted and powered by the Federal Reserve. Now the Fed wants to "save" what it already killed via financialization--housing--by buying $1 trillion in plague-infested mortgages and brute-force efforts to keep interest rates below inflation, i.e. negative rates.
Interestingly, plague, financialization and the power of the Fed all follow the same curve of emergence, expanion, maturity, stagnation and collapse. Natural systems follow S-curves, as described in this seminal paper: A Simple Model for Complex Systems.
What is financialization?
Cont for full
http://charleshughsmith.blogspot.com/2012/03/our-lets-pretend-economy-lets-pretend_08.html
Thursday, March 08, 2012
Like the bubonic plague, financialization has a lifecycle that cannot be reversed by Federal Reserve or European Central Bank intervention.
Let's pretend the Federal Reserve can force the financialization lifecycle back into expansion. Why do we need to pretend this can happen? Because the entire U.S. economy and its expansionist Central State now depends on ever-expanding financialization for its survival.
Financialization is like the bubonic plague--it constantly needs new victims as it kills off its existing hosts. Housing? Dead, killed by financialization, aided, abetted and powered by the Federal Reserve. Now the Fed wants to "save" what it already killed via financialization--housing--by buying $1 trillion in plague-infested mortgages and brute-force efforts to keep interest rates below inflation, i.e. negative rates.
Interestingly, plague, financialization and the power of the Fed all follow the same curve of emergence, expanion, maturity, stagnation and collapse. Natural systems follow S-curves, as described in this seminal paper: A Simple Model for Complex Systems.
What is financialization?
Cont for full
http://charleshughsmith.blogspot.com/2012/03/our-lets-pretend-economy-lets-pretend_08.html
Concentrate, and ASK the 8-Ball!
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