Europe’s problem is the entire western world’s problem: people don’t spend nearly enough to keep the economy growing. And it’s not as if nothing has been done to lure them into more spending. The thing is, you won’t get there by making them borrow. People will spend more only when they have more. But rapidly increasing numbers of them have precious little. And if they don’t spend, you’re not going to get more of the so-called inflation (which is defined as rising prices).It’s a dead end street, the whole thing. There’s only one school left in economics, and it was never a serious field to start with, let alone a science. But the nincompoops who emanate from the various schools and universities end up having an enormous influence on government and central bank policies, all at the cost of you and me. All they have is theories about how things should go, but nothing for when they don’t.Central banks exist to protect banks, and the banking system as a whole, from danger. They pretend that they protect the larger economy, and the people on Main Street, but that’s just a convenient little story. Enhanced by the idea that what is good for banks is also good for you. Which is absolute baloney, but it works like a charm.More often than not, banks’ interests are 180º opposites of Main Street, they certainly demonstrably have been since 2007. But then, how would you ever know? The Fed and Wall Street and Washington and all the media that are supposed to inform you but in reality promote only their propaganda, have got an iron grip on how the picture is painted.So what if the banks themselves are the danger, and not the real economy? Well, then you’re out of luck, because the first thing on the agenda is always to save the banks, no matter what its costs Main Street or the children of Main Street.And that’s why Janet Yellen holds stupid and insulting speeches like the one today. To tell you that she knows, but she just doesn’t care.
Posted on Wednesday, September 17th 2014