Student Loan Debt Collectors
[courtesy Google Images]
In last week’s article, Placebo Economics
, I compared the Federal Reserve’s primary strategies (Quantitative Easing and Zero Interest Rate Policy) for dealing with the recession to medical “placebos”. I.e., they had little or no fundamental effect in themselves, but might still be useful so long as the public believed
I wrote in part:
“ZIRP [Zero Interest Rate Policy] and QE [Quantitative Easing] have failed in Japan, the EU and US because the [people] no longer believe in the efficacy of those economic “placebos” or the wisdom of our “witch doctors” in the Federal Reserve and/or federal government.
“Once we stop believing in the ‘witch doctors’ at the Federal Reserve, how will the Fed ever restore our belief and confidence in their economic placebos? Once we know that our witch doctors have nothing real (like gold- or silver-based money) to offer us and can only provide intrinsically-worthless placebos (fiat dollars; promises to pay rather than actual payments), the economy will not be healed by mumbo-jumbo and our economic witch doctors may be run out of town on rails.
“If the previous conjecture is roughly correct, the way back to prosperity will not be achieved by means of more placebos. It will be achieved only by means of hard work and the “real medicine” of physical gold and silver.”
I was mistaken. There is another possible “way” back to prosperity besides by means of hard work, gold and silver. I don’t think this alternative “way” will work. But the temptation to try it will be almost irresistible. I have little doubt that that “way” will be tried by the Federal Reserve and/or the federal government.
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