Back from the Bahamas, here we are as usual waiting for more central bank bubble-blowing. The same thing time after time, yet expecting a different result. The colossal stupidity of it all is beyond belief. I suppose they mean well, but the consequences of this folly are already being felt as recession spreads around the world. Underinvestment, overinvestment, malinvestment. You would think after the collapse of the Soviet Union’s grand experiment and the morphing of Chinese communism into Darwinian competition that people would figure out that it is pretty much impossible for central planners to get it right. But no. And of course, worse, they apply economic ideas that are completely divorced from the way the real world works. So far the PBoC has cut rates, the BoE has increased the size of its QE program, next up is the ECB and then it is all eyes on the Fed I suppose.
Meanwhile, the real economy is slip slidin’ away. PMIs everywhere are showing shrinkage. We get some employment data over the next couple of days, the big question is will John Hussman get his negative print this month or next?
Financial Reality 