Day after day we are insulted by wannabe broadcasters like (in New Zealand) Paul Henry and Mike Hosking, who continue to interview ‘bank economists’ or ‘central bank analysts’ attempting to discover why the global economy is slowing down, what central bankers are doing about it and why our own economy is showing signs of this distress. Only Luddites would interview the people who are the very cause of the problem hoping to get a glimpse of the solution.
Massive government and private debt that has spiraled hugely since the unresolved 2008 ‘Global Financial Crisis’ is the major cause of the problem. 2008 wasn’t an event with an ending. It’s continuing and just got a whole lot worse in the interim due to massive central bank money printing, zero interest rates (ZIRP), Quantative Easing (QE), now negative interest rates (NIRP) and now a war on cash. Central bankers are out of time, clueless as to what to do. Everything they try is an experiment, the consequences are unknown. Why bother interviewing the fools causing the problem? Instead why not interview people who can come up with a non bank solution?
Spiraling debt comes from the manner in which banks create money by the Fractional Reserve system that has empowered banks to become the almighty and powerful entities, ‘too large to fail’. That is the cause of the problem along with the now massive deflationary force of an aging baby boomer generation keeping their wallets in the hip pocket, spending less.
Back in the 1970’s a local (N.Z.) politician called Bruce Beetham promoted a political party called Social Credit whose basis was that the government should be the sole creator of credit in a nation disempowering bankers out of this role. He was maligned as a ‘funny money’ man. In hind sight this solution would have solved the problem of bankers becoming the all powerful and kept our country from being beggars in the global credit markets…controlled by banks. But maybe, just maybe there are politicians who themselves are going to be attacked and maligned by the powerful bank lobby as ‘nutters’ are thinking about ways governments are going to monetize the debt they can’t repay. Whatever result the lunacy of central bank thinking is past the use by date.