The explanation, for anyone whose brain just exploded, is that despite the marionette rotation at the top, the math of Europe is still not only absolutely hopeless, not to mention meaningless, but somehow just got even worse, because take away the magical powers of modern finance to be one with the ponzi, and Europe would have already imploded.
It also means that our earlier observation that the EFSF is an AA+ equivalent credit instrument has to be revised: pro formaing out the ponzi, means it is at best AA if not A, and most likely D if one takes away all the magic bells and Keynesian whistles, unicorns and other end of the western financial world loopholes that modern finance is forced to resort to every single day to mask the fact that every country in the developed world is now 100% bankrupt.Read the whole post at Zero Hedge
European Ponzi Goes Full Retard As EFSF Found To Monetize... Itself
Tyler, our MMT heads are exploding here, but not for the reason you think.
I think we can expect to hear a lot more of this from all corners, just like we did about the Fed "monetizing the debt."
"every country in the developed world is now 100% bankrupt."
ReplyDeleteLOL! I guess Sudan and Somalia are the place to go!
ZH really amazes me in how little understanding they seem to have of macroeconomics. They seem to resist anything which doesn't fit the doomsday conspiracy ending of the story.
ReplyDeleteUnfortunately, ZH is one of the opinion setters.
ReplyDeleteI have written previously about anecdotal evidence that concerns me about this kind of conspiracy theory coupled with fantasy economics becoming a fad — or as we used to say, "hip" — among the "with-it" generational demographic. It is a disturbing trend that negates the MMT message and closes minds to it.
Whoa Tom,
ReplyDeleteI never thought of it that way. But you're right I see what you mean... an entire portion of the younger generation with just a 'cynical' or 'conspiratorial' or some such an attitude...
Tom do you think "cynical" is the correct word here?
Resp,
Yes, I think that "cynical" is a good term to describe the feeling that youth has about the system. Many feel that their future has been hijacked.
ReplyDeleteThey blame the corrupt political system, the out of control financial system and they see the Fed as key to the problem as bankers for bankers.
They are right to be cynical about the status quo and TPTB, but many are too far into the conspiratorial to be able to grasp the real issues and real solutions. The problem I see developing is that the conspiratorial is gaining steam and emerging as a fad. That's a serious obstacle in the way of presenting MMT to them as proposing a factual analysis and a viable solution.
Good catch Tom, I'll have to be looking for that angle with these types of ZH "hipsters"....
ReplyDeleteI have focused on ZH more than usual lately since I think we have to take this line seriously and confront it instead of laughing it off. Too many people are being taken in by it.
ReplyDeleteTom,
ReplyDeleteI read the comments at PragCap irt Warrens inflation cross post Cullen put up and it is scary! Same type of folks commenting at Cullens...
They need a lot of education. Resp,