Does anyone else have absolutely no idea what he is talking about? Resilient? The guy in Monty Python’s Quest for the Holy Grail was resilient too…
Inflation remains about 8%, the stock market is effectively back to February 2020 levels (inflation adjusted). Overseas, German inflation was announced at 10% today and the governing coalition announced it will implement a price cap on gas that will cost another €200 billion. In the U.K., short a Queen and with a new Prime Minister planning on lowering taxes, the Bank of England had to intervene this week and buy long dated bonds to prevent a Lehman Brothers style collapse of their banking system.
How’d we get here? The COVID response for which we have 0 to show for the $6.5 trillion that was spent on stimulus measures to fight COVID in the U.S, unless you include excess deaths maintaining a level 10% above 2019, staff revolts about having to go back to the office and social media bans every time you point out that maybe the vacccines aren’t working as advertised (remember in November 2020 when they were 93% effective??). We really are stupid, aren’t we?
Ultimately, the biggest challenge I have with today’s bizarro world is simple. Price discovery exists for a reason. Consumers make different choices when something costs $1 vs. $10. In Europe in particular, they have shut down fossil fuel investments through their fervent ESG stance and acted to reduce global supplies. In all normal situations, lower supplies would necessarily lead to higher prices to encourage investment since demand only grows. When that investment is being artificially restricted, price signals don’t encourage new supply.
Worse still, as prices rise, governments are ADDING stimulus (whether through gasoline stimmy checks in California or price caps in the UK and Germany) which doesn’t force consumers to change behavior and keeps demand artificially inflated. It’s ludicrous and it won’t work. Until prices reflect the true supply demand challenges and supply is allowed to respond, we are making the inevitable fall much much worse.
The first rule of holes is to stop digging. Sadly, digging is the only thing government can do these days.
When is someone gonna DO SOMETHING ???
Voting the right people into the decision making process... works pretty well I guess... worked good last time anyway...
are we really this stupid as a nation!???
I just don’t understand how people can’t understand..
Maybe I answered my own question...
I can't help wondering how much of this "random noise" is being inflicted solely to buy more votes in November. Let's hope we can recover from this ill-directed largesse!