Reuters (“G20 to say world needs to look beyond ultra-easy policy for growth”):
“The world’s top economies declared on Saturday that they need to look beyond ultra-low interest rates and printing money to shake the global economy out of its torpor, while renewing their focus on structural reform to spark activity.”
Telling the world to “look beyond ultra-low interest rates and printing money,” is central bankers’ code for:
1) QE (Quantitative Easing) and ZIRP (Zero Interest Rate Policies) don’t work; and, therefore,
2) Don’t expect much more QE of ZIRP in the future.
Without more QE and ZIRP, there’ll be less artificial support for stock markets and market indices can be expected to fall sharply.
The banker’s comments may even signal that there won’t be as much market manipulation as we’ve had in the past. If so, the prices of gold and silver should rise.
“The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth,” said the communique, issued at the end of a two-day meeting in Shanghai.
Say whut?! The “global recovery continues”?
Ohh, puleese—the Baltic Dry Index measures the amount of global trade that takes place by means of shipping. The Baltic Dry Index was 11,600 in A.D. 2008 and is currently 329. That’s a 97% fall in maritime cargo in the past eight years. Currently, you could probably haul most of the globe’s cargo on the Pinta, Nina and Santa Marie. There’s no way that an actual 97% decline in the Baltic Dry Index can be consistent with a purported “global recovery”.
In fact, the Baltic Dry Index’s 97% decline is proof positive that there hasn’t been a “global recovery,” there is no “global recovery” to allegedly “continue,” and there won’t be a “global recovery” in the foreseeable future.
The G-20’s references to a “global recovery” are lies.
“Monetary policies will continue to support economic activity and ensure price stability . . . but monetary policy alone [read, “central bankers alone”] cannot lead to balanced growth.”
“Fiscal policy” is the province of governments.
“Monetary policy” is the province of central banks like the Federal Reserve.
When central bankers argue that “monetary policies alone” can’t save the global economy, they implicitly admit that the central banks are out of bullets and are basically impotent. They’re admitting that they can’t solve the problem.
More, by expressly admitting that central banks and their “monetary policies” can’t save the economy, the central bankers imply that they never could solve a economic problems, and therefore, it’s only fair that the blame for the current global recession should be shared with governments.
(“The fault, dear Brutus, is not with our central bankers—it’s with our politicians.”)
Most importantly, I suspect that by declaring that “monetary policy alone cannot lead to balanced growth,” the central bankers also imply that they don’t want to bear the exclusive blame for whatever global depression might be coming. I believe the bankers are covering their backsides in anticipation of a real, global calamity that they expect to take place in the near future.
I think the G-20, central bankers are scared of being held liable for the coming calamity.
“Faltering growth and market turbulence have exacerbated policy frictions between major economies in recent months, and the statement also noted concerns over escalating geopolitical tensions and Europe’s refugee crisis.”
The terms “exacerbated policy frictions” and “escalating geopolitical tensions” are merely sanitized ways to describe the coming calamity of global poverty, starvation, war, and millions of people being starved, maimed or killed. The coming economic collapse will cause bloody chaos for which the central bankers might not merely be blamed, but hunted.
Central bankers would like to avoid being perceived as personally liable for these “escalating geopolitical tensions”.
“Christine Lagarde, managing director of the International Monetary Fund, warned that there was a risk that the recovery could derail.”
“The recovery could derail”?
Really? What “recovery” is that?
“Germany had made it clear it was not keen on new stimulus, with Finance Minister Wolfgang Schaeuble saying on Friday the debt-financed growth model had reached its limits.”
Germany’s Finance Minister has publicly made one of the most radical admissions I’ve ever seen!
That’s the first time I’ve ever heard any banker or significant government official admit or imply that there’s something inherently wrong with anything that was debt-based.
We live in a debt-based monetary system. We live in debt-based national and global economies. The whole, global “system” is based on debt.
By expressly admitting that the “debt-based growth model” was flawed, German Finance Minister Schaeuble implicitly admitted that the entire debt-based monetary system is flawed—and, if so, is therefore on the way out.
“China’s Finance Minister Lou Jiwei said, ‘Monetary policy [orchestrated by the central banks] will probably have to be kept appropriately loose, even though people have realized that its role cannot replace fiscal [government] policy“.
First, the G-20’s central bankers admitted again that they alone can’t solve the global economy’s problems with “monetary policies” like QE and ZIRP. I.e., they have no effective solutions for current or anticipated economic problems.
Second, they’re trying to at least share–and arguably, shift—blame for our current and future economic problems from central banks to governments.
IMPLICATION: The central bankers see a major collapse coming and, like the proverbial rats, are abandoning the ship and swimming for shore and safety.
IMPLICATION: The G-20’s central bankers know that we’re on the verge of an economic calamity. They don’t see any way to avoid that calamity. Therefore, they’re trying to preempt being blamed for that calamity by shifting blame to governments.
The big point is that the central bankers seem to be acting as if they know that an economic calamity is coming—and coming soon.