Note to reader: I recently received a number of comments regarding my economic theories and will share one below, but I wanted to emphasize this one important point in my analysis; Under QE, sovereign debt levels and their growth rates more strongly determine asset price inflation than do M2 and M3 growth.
If the owners of the central banks ever lost control of QE and the other monetary policies they promulgated in the wake of the manufactured 2008 collapses, then all the money printing in the world could not save the asset markets. Observe the nations that experienced hyper-monetary inflation and see how their asset markets fared with respect to the monetary printing. The asset prices never kept pace. That’s because their economies and financial systems fell apart.
[I] just wanted you to know I started following your blog about 4 months ago. Very impressed with your observations. Don’t agree with everything, but think you are about 90-95% right about trends. The system is NOT going to crash, and the monetary/system reset already occurred in 2007-2009. They are just going to run up the debt forever, money has ceased to have any true value (if it ever did). I was a doomer catastrophist expecting the sky to fall every month, and have struggled to ween myself from this self-destructive and self-defeating mindset.
Here was my response (edited for grammar):
Thanks for the email. I guess you are one of only a few who agree somewhat with my assessments as I do not get much fan mail.
The more debt, the more money. The bigger the debt millstone, the less that this money can drive up prices. [There is also the] incentive to spread the money outside the U.S. and keep it parked at the Fed [Excess Reserves]. It all gets sterilized. While the vast majority of the people, who cannot come to terms with this ostensibly grim dynamic, get stuffed with the debt, I see this as an auspicious opportunity. I see it as a time to move forward and make hay, because the sun is shining.
I am just a small potato, but I prefer this system over all others. Where else can I sit at home and get wealthier? Imagine the rest of the top 10%. They love what is going on. They are giddy, and they are the only ones that matter in this system. The poor debt slaves do not matter as long as they keep spending.
What will bring this system down? Only if the debt slaves stop spending. I drive about and shop, work on properties, and today I stopped at Trader Joe’s on the way home and the roads were jammed on Saturday, and the people were spending and spending. They cannot stop.
I marvel and thank the debt slaves for accepting their conditioning to spend until they are broke and for perpetuating their own servitude. I see no end. M2 can climb and climb forever and the economists can grab at all sorts of straws to try to explain what is going on, but you and I know that the new system emerged in 2008.
The elites now control it all. They control the media, TV programming, movies, internet searches, news, [most of the alt-finance], social media, etc., and they demand the sheep spend. The sheep are following their orders without even knowing what they are doing. With QE and all this new monetary policy, the elites now control the economy. It really is very simple.
If I didn’t comprehend what was going on, I too, would be guessing that a collapse or crash was coming soon. It may come, but the alt-finance have been predicting one all decade and beyond. It will happen eventually, but I am sad to report that it will probably not happen the way they think. They were eventually right with the one in 2008 and lost out on that auspicious opportunity.
My observation; many knowledgeable economists cannot come to terms with what is going on, so they keep coming up with different theories. My theory has worked and served me well for a long time, but my ideas are too difficult to accept. To accept them would mean something much more sinister is at play. To accept them would mean that much of what they learned was a farce. The fact that so many people in the alt-finance cannot accept this means that this system has plenty of legs to run. They don’t know their adversary.
Anyway, thanks for reading and keeping an open mind.