Monday, June 30, 2014

Armed and Loaded Torpedoes Aimed at Our "Recovery"

Central Bankers Issue Strong Warning on Asset Bubbles from the New York Times
"Investors, desperate to earn returns even as official interest rates are at or near record lows, have been driving up the prices of stocks and other assets with little regard for risk, the Bank for International Settlements in Basel, Switzerland, said in its annual report published Sunday."

It is incredible that central bankers have the chutzpa to suggest making it “easier to fire people” and effectively tighten credit by “raising more capital”. The origins of this malaise can be traced to Bush’s success in funding the Iraq War entirely through debt.  The common sense “Guns or Butter” principle was jettisoned for supply side fantasy. In fact, Americans were engaged in an orgy of credit fueled consumption at the height of war spending. Of course these profits went straight into the pockets of the wealthy. The resultant crash, triggered by inflation and nefarious financial practices, resulted in further upward wealth transfer. First the wealthy were forgiven the vast majority of their corporate debt, and then they snapped up securities, real estate and commodities at fire sale prices, largely by leveraging zero interest government securities (government securities only available to the wealthy). Keep in mind, at these financial levels, there is no distinction between corporate and personal wealth. The wealth transfer to the 0.01% over the past 6 years is tantamount to the sacking of Peru by the Conquistadors.
 Posted by: hopeandespair

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