Deflation

That’s the verdict from one of the luminaries of the economics blogs, Yves Smith.

She’s expecting the unwinding of it all fairly soon.  A stock market crash, blah blah.

I don’t know.  When it comes to timing I’m no sage.  I tend to be so far ahead of the curve that even if I had funds to invest I wouldn’t profit because no one can wait that long.  Still, as important and prescient as Yves’ little blog post there is, she’s not saying anything I haven’t already been saying for years.  The ultimate failure of QE has never been a mystery to me.

This post was from April of this year.  I noted the stagnating effect of a perpetually low interest rate environment – the environment QE is designed to maintain – in a post over a year and a half ago.  And again here.  And you should read this one.  And this one.  And, well, go ahead.

Here’s one from about two years ago.

Japan has been QE-ing for two decades.  There’s no end in sight, and it’s accomplishing nothing except, perhaps, delaying things.  I suppose that is the point or the goal, or whatever.  By that metric it’s something of a success.  Like I said, two decades.

The “velocity” of money is at a 60 year low, Yves tells us.  Sooner or later it seizes up, right?

Your guess is as good as mine.

 

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