@superposition…the additional debt load is stupid, of course. But the bigger issue that lurks out there is the increase in the money supply. And it’s not only the Fed, it’s the BOJ and the ECB as well. They were slower on the uptake than President Obama to implement an appropriate fiscal stimulus in 2009, are still expanding their balance sheets. The Fed will increase interest rates now, and sell off some of their holdings—probably triggering an inverted swap/yield curves. Who knows when the curves will invert, but the equity markets will swoon.
When you add the loss of jobs due to automation, the social consequences of the next crash could be severe. Consider as an example that 600,000 oilfield roustabouts have lost their jobs in less than 2 years due to automated drilling and drilling platform computers that “learn” as they go. And, this while the rig count has skyrocketed. Fewer jobs, more productivity. McKinsey recently published an extensive report on the topic of job losses due to automation. It’s fascinating and scary.
While many, including myself, thought the increases in money supply would lead to inflation, it hasn’t happened. I think it’s the time scale involved. The inflated central bank balance sheets are unprecedented in magnitude, and it will take longer than anyone originally figured to unwind. But once it does, watch out! Right now, business is still good, the equity markets like the tax bill, and the party continues.
But make no mistake, ultimately we have to deal with these staggering numbers. The tax bill is stupid, ignorant, misguided, Ill-conceived, and counterproductive. It expands the deficit, adds to the debt, increases economic inequality, foments potential social unrest, and has practically no positive attributes. Yes, corporations “might” grow a little faster, but at what cost?
@superposition…the additional debt load is stupid, of course. But the bigger issue that lurks out there is the increase in the money supply. And it’s not only the Fed, it’s the BOJ and the ECB as well. They were slower on the uptake than President Obama to implement an appropriate fiscal stimulus in 2009, are still expanding their balance sheets. The Fed will increase interest rates now, and sell off some of their holdings—probably triggering an inverted swap/yield curves. Who knows when the curves will invert, but the equity markets will swoon.
When you add the loss of jobs due to automation, the social consequences of the next crash could be severe. Consider as an example that 600,000 oilfield roustabouts have lost their jobs in less than 2 years due to automated drilling and drilling platform computers that “learn” as they go. And, this while the rig count has skyrocketed. Fewer jobs, more productivity. McKinsey recently published an extensive report on the topic of job losses due to automation. It’s fascinating and scary.
While many, including myself, thought the increases in money supply would lead to inflation, it hasn’t happened. I think it’s the time scale involved. The inflated central bank balance sheets are unprecedented in magnitude, and it will take longer than anyone originally figured to unwind. But once it does, watch out! Right now, business is still good, the equity markets like the tax bill, and the party continues.
But make no mistake, ultimately we have to deal with these staggering numbers. The tax bill is stupid, ignorant, misguided, Ill-conceived, and counterproductive. It expands the deficit, adds to the debt, increases economic inequality, foments potential social unrest, and has practically no positive attributes. Yes, corporations “might” grow a little faster, but at what cost?