August

In the middle of August, the summer of 2016, northern hemisphere edition.

  • Trump and Clinton are our choices for president, media want Hill.
  • US Fed debt at an all time high, $20,000,000,000,000.
  • Most big economy sovereign debt at or below zero.
  • Inflation non-existent.
  • PokemonGo occupies anyone under 30.
  • 94,000,000 people of working age NOT looking for/in work in US
  • Oil still under $45, US production steady.
  • Middle East still screwed based on Obama/Clinton/Kerry mess.
  • Obama pays $400,000,000 in CASH for hostages in Iran.

That’s all too depressing to continue.

Meanwhile…

In the middle of the northern summer now, although we are a month removed from the summer solstice, so at least we’re on the way to autumn.

Markets are as odd as ever, with the horror-show of European banks still leading the news. I really do not understand how this works; central banks print money, buy bonds and push interest rates below zero with the idea of creating demand for money. Cheap money should spark borrowing and then inflation. Is that right so far?

Here in the real world it’s confidence that creates demand for borrowing. If businesses can’t see a return on the money they borrow, plus a bit, they’re not going to. We’ve seen this in big US companies: they borrow only to buy back their own shares, pushing their price north. To Janet and her minions, that’s the real economy.

Meanwhile we have US GDP growth back down to 1%. Uh oh. What do we do now, FedHeads? Lower rates? Negative? Do a Kuroda and buy ETFs? Seems these bozos have backed us all into a corner and still the banks aren’t fixed.

Awesome.