Thursday, October 22, 2009

FAT DUMB AND HAPPY ARE THE BOURGEOIS

The big burnout Stimulus packages have fed speculation, not investment, creating dangerous new asset bubbles

Andy Xie Oct 21, 2009

"Central banks around the world have released massive amounts of money in response to the current financial crisis. How to exit from the current super-loose monetary environment has become a popular discussion. The central bankers are talking down the prospect of raising interest rates, arguing that the weak economy keeps inflation in check. But the proposition that a weak economy means low inflation is false. The stagflation of the 1970s proves it."

This round of monetary growth has mainly fed speculation, not credit demand for consumption or investment. Speculation has reached a dangerous point with the oil price threatening to reach triple digits again. Its implications for inflation may spook the central banks to raise interest rates quickly and trigger another crash."

SO what we are left is an even greater mal adjusted economy, rampant speculation apart from fundamentals, false earnings for banks if you consider problem assets being kept away from mark to market value....a huge part of SPX 500.

Even if it IS better, or it seems better, it is because we are being PROPPED UP...in the MSM and stock market.....some co's may do well, on the whole head lopping can only take so far.

WE END UP WITH ZOMBIE BANKS.....excuse me, how do you grow economy with credit contracting, ZOMBIE BANKS who don't lend, assets at false values.......doubling aggregate money base......stimuls is only demand....gee what we freakin need is MORE STIMULUS

LIKE CAFFEINE....when you come down you crash.

Duratek

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