It is quite obvious that the global economy is collapsing,leading to a deep recession,for which many great economists-not only D.Stockman -are suggesting that could descend into the worst disaster,humanity ever seen .
, .....the real power at the heart of modern crony capitalist finance is being exercised by a small posse of unelected central bankers and their megaphones and acolytes on Wall Street and the other major financial centers. Citibank’s Steve Englander is on the same page of fraudulent finance as his former employer at the New York Fed and the Reserve Board itself.
This cat has the gall to demand that the governments of the world bury themselves even deeper in debt when that’s exactly what they have been doing most of this century?
‘Man-Up’ My Eye——-The Germans Got It Right on G-20 Stimulus…..Nein!
by David Stockman •
Here’s just one more example of how central banks and their governments have turned financial markets into a romper room of crybabies. They just can’t stop demanding another nip on the juice bottle:
As finance chiefs and central bankers from Group of 20 nations gather in Shanghai, Citigroup Inc.’s Steven Englander said a failure to include more explicit support for fiscal stimulus in the closing statement from policy makers would be taken badly by investors.…….“Keeping the previous language would be very disappointing and would be viewed as either complacent or reflecting policy paralysis,” Englander, Citigroup’s head of currency strategy for major developed economies, said in a Feb. 25 report. He urged the G-20 to “man up and tell member countries that monetary policy should be accompanied by fiscal expansion.”
‘Man-up’ my eye. What’s needed here is for so-called economists like Dr. Englander to crawl out of the rabbit hole they’ve been in for years on end. Indeed, in his case the rabbit hole apparently started at 33 Liberty Street where he was the New York Fed research director; and then tunneled through the bowels of Barclays, Citibank/Salomon Smith Barney and the OECD.
As they say, Englander has never had a real main street job. Nor has he met a “market” that wasn’t medicated and manipulated by agencies of the state; or that the gamblers and punters he writes for didn’t think should be goosed even more.
In fact, the world is now staggering under $60 trillion of sovereign debt and $225 trillion of total debt. Since the central bankers, finance ministers and IMF apparatchiks now fluttering around in Shanghai have been banging the “stimulus” lever for upwards of two decades, you have to be deep in the rabbit hole to think that what’s needed now is even more of the same.
Just exactly who does he think has any fiscal headroom left? Would that be Japan, which has public debt at 240% of GDP already; which is still borrowing 40% of what it spends even after last year’s consumption tax increase; and which is fast heading for fiscal/demographic demise as a bankrupt retirement colony?
In Europe, leave the Germans out of it because they still represent an island of fiscal rationality in a world governed by Keynesian policy apparatchiks such as Jack Lew and Christine Legarde. But then the rest of the eurozone’s debt-to-GDP ratio is well over 100% on average and is fast heading for the fiscal dead-end represented by Italy at 133%.
Needless to say, aging socialist welfare states have no chance of survival with public debt burdens of that magnitude. So who in their right mind could recommend that the EU states get out their fiscal helicopters? Einstein was not wrong when he called that insanity.
Just assume that the average nominal growth rate for national income and wages/salaries during the next decade averages the same as the last 15 years. And that would be a real feat given the impending collapse of the Red Ponzi and the tidal wave of deflation rolling through the global economy.
Still, under that assumption you get cummulative deficits of at least $15 trillion and a public debt total of $35 trillion by mid-way in the next decade. Since nominal GDP has been growing at the tepid rate of 2.7% annually since Q42007 and shows no signs of breaking out of that zone, it means that the US debt-to-GDP ratio will be right up there in the Italian League at 130% by 2025.