Rather than play distracting semantic games we need only ask what's the verdict so far? It is liquid swindle consolidating increasingly depreciated assets into fewer hands. This has been the way of it for a long time now—several decades in fact.
Oh sure, many more moments have been spent pretending the burden of parabolically increasing financial claims on a collapsing physical economy is not only sustainable, but somehow is conducive to increasing values assigned to these claims. Yet as long as collapse of physical economic output continues unabated, these claims are doomed to the fate of the Holland tulip mania. Rather than tulip bulbs, though, now we're dealing with unproductive credit. In recent former times this was manufactured through a shadow banking system employing an infinite multiplier, but now is more or less entirely accommodated through direct central bank intervention. All the while, nothing is being done to reverse the physical economy's collapse. This instead is being encouraged. Thus, if we consider the cost of an Ivy League education, we must conclude the price of insanity really is through the roof!
There's only one question Congress need ask Confetti this week: Are you insane, Mr. Chairman? If he answers in the negative, then it will be up to Congress to prove it by passing legislation directing the Fed to provide trillions of dollars of credit for the build out of the hydrogen economy, this at last venturing to reverse the physical economy's collapse. Resolution of our present day's woes are that simple and we should not forget it.
If literally forcing the Fed to meet its employment mandate does not happen, then we can look forward to the next round of swindle, likely targeting the EMU, and attendant, further collapse of the global physical economy. The crowd hailing "Europe" will either come around to embrace uniquely American, Hamiltonian ideas, this that prosperity those who back "Europe" claim they desire be concretely institutionalized, or Europe dies on the alter of the London-New York Axis of Fraud Church of Holy Unproductive Financial Claims. It's either reorganize the euro-zone and employ central banks to the task of issuing productive credit protected from today's mountain of unsustainable claims, or voluntarily submit to massive theft and those vile forms of political organization Venetians for centuries have been wont to impose on the continent, and, indeed, are venturing to impose on the United States itself.
Now, being that Confetti probably is scheduled for several hours to appear before Congress, the greater focus should turn to the immediately pressing matter of rising interest rates. Caesar cannot deny his every effort has ventured to pin these to the floor. Nor can he deny he presently is at grave risk of failing in this effort, both conceptually and materially (inviting the Fed's very insolvency). Confetti oversees a banking empire that, evidently is quite adept at enriching itself, but what is it doing to enrich the nation's physical output and wealth creating capacity? This is the fundamental question Confetti must be made to answer. Any smokescreen he throws up claiming the operations of a relatively lilliputian federal government (contrasted to the private sector) are to be assigned blame for rising rates will be easily beaten back with simple formulations of supply and demand.
"Mr. Chairman, is your quantitative easing policy not encouraging an increasing supply of both Treasury securities and mortgage-backed securities, and must this increasing supply fundamentally be met by increasing demand in order for interest rates to remain in a downward trajectory?"
"Mr. Chairman, do you foresee a moment when your quantitative easing policy precipitates outright debt security revulsion on account of physically constrained demand that, effectively is being imposed by circumstance finding profound imbalance between [collapsing] physical output and [increasing] financial claims on that output?"
Only the dullest observer does not comprehend how a decades-running hyperinflationary policy presently finds the globe at the precipice of suffering a Weimar-like experience. Likewise, we have reached the moment when it becomes increasingly impossible to impose sacrifice without precipitating mass resistance, and so is more likely the moment we cross the threshold into Weimar-like hyperinflation. Thus, we can forget semantic games claiming "tapering" is even possible. It's either liquid swindle or hyperinflationary drowning per today's monetarist prescriptions originating from the Church of Holy Unproductive Financial Claims. These two choices, alone, are presented by bankrupt demagogues, like Confetti, in service of those who otherwise possess unholy, ulterior motives.
Better understanding fundamental reality, then, we have greater insight into mechanics likely driving upcoming trading in claims at the very bottom of the capital structure. For the time being it's liquid swindle in the driver's seat, and this in desperate attempt to stave off collapse of increasingly weighty claims much higher up in the capital structure. All eyes on Europe after the "American" animating liquid swindle, there and everywhere, has spoken...
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