Gab@StFerdinandIII - https://unstabbinated.substack.com/
Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands. Cults everywhere: Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...
Tempus Fugit Memento Mori - Time Flies Remember Death
The cult of central banks. It seems that whenever a Central Banker offers 'insight' or instruction 'markets' in stocks react. The cult of Keynesian-Monetarist policy holds the following key assumptions:
Managing the money supply is best left to 'experts' who are in effect government appointed employees.
Managing the money supply can be used to increase 'demand' and spending.
Increasing demand for money and hence spending is good because 70% of the economy is derived from consumer spending.
There is no need to have a gold or metallic standard since the government can 'set' the 'value' of money.
None of these assumptions are valid.
Once you start micro-managing money supply, the institution or 'bank' very quickly becomes a lackey of government. It is a myth that central banks are independent actors. Of course they are not.
Demand in the economy might be 30-40% of the overall transactional economy. Most of the economy is supply based and it is the supply of jobs, capital and investments which creates wealth, profits and innovation.
Spending is not inherently noble or good. The savings rate today is only 3% versus 13% 30 years ago. We are awash in debt with little in savings.
Since the gold standard was abolished in 1971 85 % of the purchasing power of a dollar has been erased. This is obviously an inflationary phenomenon which is one main reason why housing costs 6 x or more today, than in 1971.
The results of Keynesian-Socialist Central Banking ?
A destruction of purchasing power.
Endless rising prices – ridiculous chatter about deflation notwithstanding. [Gold and oil are up over 5 times in the past 15 years]
Cycles of housing and stocks booms and busts as 'investors' better-named speculators pile into stock markets or housing stocks, based on zero interest rates and easy to get loans. Debt to buy both stocks and housing is now at all time highs.
Fraudulent 'models' which implausibly maintain that when 30% of your population is not working your 'unemployment rate' is only 6%; or that inflation is zero; or that GDP [a pure spending calculation] is somehow related to the real economy and has grown precisely 4.2% [at least 30% of the GDP rate is a guess, and spending is not the real economy].
By all means believe that Central Bankers are omnipotent. And by all means blame 'markets' when their Keynesian theologies blow up and cause destruction. If you do however, please don't maintain you are rational and informed.