We’re starting to see the lengths governments will go to in order to maintain financial stability. You’d think the mountains of debt will lead to a day of reckoning, but, emboldened by the global government response to the 2008 financial crisis, the high priests of finance are becoming more emboldened. Look out below. Read on…
Got money in your savings account or RRSP?
Not for long.
The U.S. is already propping up the stock market via the Fed.
I am critical of the posted article, in that it is top-heavy in libertarian economic theory, and skimps on actual data. But the author is right: the central banks are bailing out the stock and bond markets, and that the current stock market recovery is running on fumes. There is a debate in the business media on this, as our recession worsens. I believe in the pessimist-critics. My small, retail RRIF portfolio is mostly bonds, utilities and gold stocks. And this portfolio is back to its mid-February highs.
The reality is that the bankrupt welfare states are so far down the rabbit hole of statism that the last practicing Keynesian in Canada, Stephen Harper, who ceremoniously cast out libertarians from influencing the party, is seen as a radical right winger. The problem with Keynesian economics is that few nations can muster the political will to scale down the “fiscal stimulus”, run surpluses, and pay down debt during the “good times” while saving fiscal amo for the recessions. We’ve since devolved to an continuous orgy of “stimulus” (free stuff Ad infinitum) while ignoring the laws of diminishing returns. Deflation followed by stagflation awaits with a vengeance. The central banks are now complicit in the late stage desperation (NIRP and ZIRP making equities the only game for most investors) in pouring liquidity into economies that have been prevented from cleansing mal-investments for decades while protecting the small but richest segments from the free market.