Source: Smith/Of Two Minds

“Central banks, like generals, always fight the last war – until the war is lost. The global economy is careening into recession (call it a ‘slowdown’ if you are employed by the Corporate-State Media), and while we don’t yet know just how deep and wide this recession will be, we can make an educated guess that it won’t be a repeat of any of the previous five recessions: 1973-74, 1981-82, 1990-91, 2001-02 or 2008-09. Recessions triggered by energy or financial crises tend to be short and shallow as the crisis soon eases; recessions caused by structural imbalances tend to be enduringly brutal….No longer content with blowing one credit-speculative bubble at a time, central bankers coordinated their efforts in 2009-2018 and inflated the Everything Bubble. But the Everything Bubble didn’t resolve or even address the multiple structural imbalances in the U.S. and global economies; it merely papered them over with a triple-whammy credit-speculative orgy of unprecedented enormity….The instabilities and imbalances of economies can be papered over with debt for a time, but debt and financialization tricks don’t actually fix what’s broken – they make the problems worse. Welcome to the recession of 2019-2021, when central bank policies are finally revealed as the source of half our problems rather than the solution. We’re way overdue for a sell-everything recession, one that the Fed will only make worse by pursuing its usual policies of lowering interest rates and goosing easy money. The structural problems are now acute, and giving more free money to financiers and politically powerful corporations isn’t going to fix what’s broken in the U.S. economy.”

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