Jackson Hole: the three tough questions central banks must ask themselves
There is only one question. Will they double down on even more monetary insanity, place the world in even greater jeopardy, or will they stop with the disastrous Keynesian stimulus, allow the monetary system to heal, and right itself?
More below, including a monkey with a gun.
This is an easy one, they yell, "Damn the torpedoes, full speed into the iceberg!" Really!
We will know once the bankers return from Jackson Hole. "This year’s title is “Designing Resilient Monetary Policy Frameworks for the Future”, which could mean almost anything." But it doesn't mean almost anything, it means more Keynesianism, more inane monetary policy, and a greater chance for serious monetary problems.
"Instead, in a world awash with printed money, with deflation becoming permanent, with bonds from major economies paying negative yields, and with weirder and weirder experiments, from below-zero rates to abolishing cash, gaining increasing traction, they would be better off taking a look at themselves, and asking some hard questions.
Here are three good ones to start with: is quantitative easting actually working?
Have we broken the banking system?
And isn’t it time to update economic models that no longer tell us much about the real world?"
These are actually pretty good questions, so it is guaranteed they will not be addressed. This group is hidebound by groupthink, and a herd mentality. They remember nothing but the 1970s stagflation, and 1930s deflation. They learned nothing from either of these events, and continue to believe they are capable of operating the world economy as if it were a tricycle. Then again, not a one could probably ride an actual tricycle.
Ultimately, the real problem is that the various governments want to spend oodles of money, much more money than their taxpayers are willing to part with, and so these governments spend more than they receive in taxes. This creates deficits, which creates debt, which distorts the entire system, from investments, to debt, to monetary, to the real economy. Then the Central Bankers step in to "stabilize" the system, but like the "man behind the curtain" in the Wizard of Oz they know nothing, but still act.
This is as sane as the idea of giving a chimp a gun.