Thursday, November 03, 2016
Criminals getting tired of crime?
Interesting observation by one of the money-talkers on radio. Stepping back from the idiocy of politics, one big trend is starting to show up. Central banks are finally getting tired of ZIRP/QE. They haven't turned back toward honest economics yet, but it looks like they're starting to remove the lock from the steering wheel. This week, the central banks of Japan, China, Canada, Australia, England, and US all indicated that they were not going to take further steps toward ZIRP/QE.
If this trend continues and accelerates until we resume honest uncontrolled interest rates and comparatively stable money supplies, a whole lot of problems will be solved without the interference of politics. Savers will start to spend again. Pension funds and insurers can start to recover. Borrowers (including stock speculators and governments) will have to slow down. Banks will realize they can't just sit there and suck Janet's titties; they will have to start being banks again. They will have to pay for deposits and make cautious loans. Investors may consider using their money productively, though that's the least likely part of this extrapolation.
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