When someone raises a flag of caution during a tricky situation, only to then lose it, because he has stumbled into groupthink, do you listen to him, or do you shut him out?
A rare show of emotion from the bond market correspondent Rick Santelli — ‘That’s the strategy: play this one out and assign the blame for the coming downturn to extraneous factors, disassociating it from the Fed’s monetary policy’ — who is tired of indicating how the tapering merely patched over the problem, leading to an even more bloated, even less stable economy, reveals the ugly reality. The cover of the ‘recovery’ is blown and the warnings resurface: a repeat of 2008 is looming sometime down the line, a crisis which will be more severe than the previous one, whose downside potential is increasing the more one puts off dealing with it properly.
Kicking the can down the road merely adds to the strain down the other end, but the voices of consent cry ‘patience’ and ‘everything will be alright,’ as if we were in a Disney movie, or at church. They want to see the game played out because that’s the strategy: play this one out and assign the blame for the coming downturn to extraneous factors, disassociating it from the Fed’s monetary policy.
For now, equities rule and the dollar is holding, and that’s what’s driving the markets up (and monetary policy forth, yielding consensus) but the question is, for how much longer will the run continue, and how low will the dollar, the Dow and the general economy plummet once the juice can no longer be pushed?
Moreover, what does one do if one sees this coming? Stoke up global tension perhaps, prepping oneself for the one cure to solve all insolvent situations: war.
What better way to deal with this malfunction-of-an-economy, this flimsy and phoney recovery, than to string the economists along, riding the wave for as long as one can; then shift the blame to other factors
Call the last part a conspiracy theory, but war is a convenient way out for politicians who have no solutions to a systemic problem. It’s an excellent way to realign alliances and settle outstanding or bad debt. It’s an excellent tool for shifting public opinion, if done in the right way, if the conflict is chosen wisely. What better way to deal with this malfunction-of-an-economy, this flimsy and phoney recovery, than to string the economists along, riding the wave for as long as one can; then shift the blame to other factors when the tide turns, while tapping the powers of conflict to settle the score in a way that rewrites the slate and rebalances the balance sheet?
For this reason alone, to advance the purpose, Santelli and co will be invited by the panels to go nuts on live TV, where they will be brushed away and ridiculed, because the setup requires fools like them, ‘maniacs’ who lose it on air, screaming Armageddon, catastrophe and woes-me, so that public opinion can laugh at them, creating a protective barrier against the cautionary voices, fabricating a consensus of consent around the current policies. Santelli and co will be dubbed the naysayers in a nation of optimists, and the game will be played out.
After the tides turn and the numbers drop, it will be a different story: the knives will come out, looking for scapegoats and villains. Those who warned of this calamity may even be blamed for inducing it. It’s an ancient narrative that works, and it is being played out once again, as we speak, with astounding hubris, which is as disturbing as it is ingenious.
Stay tuned and remember: ‘It’s ok. Be patient and everything will be alright. Because the economy is like God. It will provide.’
From your constructively cynical Spin Doctor,
Eyes open, mind sharp.