We are all royally screwed. Yup. That's right. But then again, it's not like this is any sort of new news. Nope. It's not. This is old news. How old? Well, we announced the impending debacle when we started with this site, in 2013. Others have been doing so for far more years. Some for decades. The record is probably held by Mises himself; about 66 years ago. Why is this so? Because this current debacle, all the previous ones and the monster economic calamities that will inevitably follow are nothing more than the consequences of the Boom-Bust cycle.
Yes. Governments print. For the "greater good".
Yes. Government spend. For the "greater good".
Yes. Governments create inflation. For the "greater good".
Yes. Governments fight inflation. For the "greater good".
Yes. Governments precipitate economic debacles. For the "greater good"???
And there you have it. The Boom-Bust cycle in a nutshell. Nothing new, just worth remembering.
And now for the not-so-new, news.
Several newspapers of the mainstream persuasion keep feeding us "good-news" stories which are all based on "bad-news" facts? Psychotic? You bet! And then people ask: how is this possible? Things were going so well and now this??? Yup. Now this.
But let's take a look at the now this; after all, this is an educational site.
TO THE NEWS!
These are some of the headlines summarized from news agencies and media from throughout the world. Our commentary follows immediately below:
"Stocks rise in hopes of the G20 growth push".
This would be the "good news" we made reference to. So. It would seem that because of an utterly subjective view stock speculators bid up the prices of stocks. Aha. Uhu. Hohum… and that is "good" economic news because…? This may come as a surprise to government apparatchiks and mainstream economists, but the state of the stock market has never been correlated with economic conditions. Not with any accuracy. If it would be, any monkey would be able to make money in the stock market. In reality, the only movements in stock markets that are actually correlated with economic conditions are the ones that happen after a change in economic conditions. A stock market is always a lagging indicator of economic conditions. And so, what has a lagging indicator to do with the economy? Nothing. Absolutely nothing. If indicators would be able to influence the economy then our economies would be synchronized with lunar phases!
"One more day of steady oil and currency prices"
Aha. Uhu. Soooo it is good economic news that a meaningless economic indicator is stagnating. As opposed to be dropping like a stone. Well… we guess that stagnation and putrefaction is better than total collapse. There. Good news for you!
"despite UK's debate over whether to leave the EU or not"
Aha. Uhu. Soooo the idea that a country may leave the EU may seem to incite visions of economic doom and gloom. And why precisely is this? No reason. Really? Really. Think! Even if the UK leaves the EU, the only thing this will mean is that the apparatchiks in Brussels won't be dictating rules to the apparatchiks in London. Other than that, it will be economic transactions as usual. Why? Because UK simply can't survive without trading with the EU. Thus, even if the UK formally leaves the EU, practically, it won't make any difference. Sure. There will be different "free trade" agreements, but that will be all. The trade will continue. Thus, this is much ado about nothing. More good news!
"Beijing said that they had the room and tools to prop-up the Chinese economy"
Frigging fran-tas-tic! So, the Chinese not only discovered the printing press, they discovered fiat money and the magic process to generate spending currency (not actual wealth) out of thin air. Which is what got us here in the first place. Which is what got the Chinese where they are today. And what are they saying? Don't you worry little westerner, we can print all the Yuan we can possibly need. Eeeeeeverything is going to be juuuuuuust fine. Right! That's why the Chinese have mysteriously stopped printing some key economic variables. But don't you worry. They will get around to print them. Eventually. For historical reasons. You know. There! And the good news keep coming!
"EU markets gained 2%"
Yes. That's right. This is the third time they mentioned the stock exchange situation. Why? Because when you don't have anything good to say, keep repeating the same "good" story time and time again. After all, we all know that if you keep lying, eventually, you will be able to convince most of the people, most of the time. Don't believe us? Ask Goebbeles (Reich Minister of Propaganda). Even more good news! Rejoice!
"the Yuan will have to be depreciated"
Because the Chinese cannot "defend" (i.e. keep selling their reserves and purchasing Yuan) like the world will end tomorrow. Thus, they will have to depreciate. And this is good because? If you are Chinese and your savings are in Yuan, how exactly will help you to spend more and reactivate the economy if by the time they are done depreciating your disposable income will be far, far smaller??? But that's OK. Because a "cheaper" Yuan will boost Chinese exports to… to…to… whom exactly? Who is left in the world that is not in an economic crisis? The old saying applies: Sell!!!! Sure boss, to whom??? See? More fantastic news!
"the G20 will convince the market that said depreciation(s) won't constitute a currency war"
Really? Seriously? Sooooo what the Chinese and EU and USA and Japan and Canada and Russia and… well… pretty much every country in the world has been doing so far is most definitively not a currency war, right? So far there haven't been massive devaluations, followed by other devaluations. Right. Because, you know, we can't get into a currency war if we are already in a currency war! There. See? They are not lying to you. The truth. More good stuff.
"economists and government officials have raised the prospect of governments necessitating to spend more to stimulate growth"
Of course! Silly us! It's not like governments throughout the world have been printing and spending like there is no tomorrow. Because really, at this pace, there isn't one. Because, you know, negative interest rates are just an experiment to see what happens. Trillions of … well… any "strong" currency you care to name… spent on "supporting" "at risk" "financial institutions" is money well spent and it is not like these "financial institutions" have taken all this "free money" and loaned to pillars of stability within the community of nations, such as Grece… or Italy… or Portugal… naaaaaa… that didn't happen. We need more spending because, you know, we desperately need more boom and busts… because you know… inflation is good for you! Excellent news!
"monetary and fiscal policy is exhausted globally and a structural reform is needed"
In other words, the "masters of the universe" have discovered that printing does not work any longer. Of course, this leaves them cornered because… well… because printing is the only thing they ever do. Sure, their printing may come disguised in many shapes but at the end of the day, that's what they do. But now even this is not working. But not to worry dear voter because the instantiation of "structural reforms" is the thing. Of course, they won't tell you what these "structural reforms" may be, but rest assured they will, in one way or another, represent a step forward toward communism. But that's OK because we are already at the edge of the precipice. Yeah…. What we definitively need is another step forward… Yeah… Look, what do you think it is going to happen? Simple, they will get the money any way they can. And how do they can? Simple. By taking wealth from your pocket through "structural reforms". Alleluia! And the good news keep coming!
"but the markets should not expect a concert action from the G20 meeting"
That's right! They recognized that they don't know what to do, they recognize that whatever they do will be ugly but just in case, they announce that they will do nothing! Nothing at all! This is quite interesting considering that they have been telling us for 200+ years that we absolutely, positively, definitively need governments to "manage" the free markets. And now, in this supreme hour of economic litmus test… they eat their words! That's right! Nothing will be done! Absolutely nothing! Hurrah! The happy festivities should begin very, very soon.
CONCLUSION
Good news everybody! Here, take one. What are they? Black pills, of course. Guaranteed to kill you within minutes. Guaranteed to work by our fearless leaders who deliver good news after good news. Honestly, we don't understand what this fuzz is all about. After all, the G20 meeting will make eeeeeeverything just right. You just wait you. Oh infidel of little or no faith. Just you wait.
We?
We will continue to collect wealth. The real stuff that cannot be destroyed by governments. You know. Stuff, not fiat currencies. The alpha strategy. But you don't have to follow in our footsteps. You can trust your government. After all, what's the worst that can happen? And if it does… well… you got your free black pill… right?
Note: please see the Glossary if you are unfamiliar with certain words.