The Central Bankers’ Death Wish

• The Central Bankers’ Death Wish
  by David Stockman via Contra Corner blog, http://www.zerohedge.com/
  This is getting just plain ridiculous. The robo-traders were raging to the tune of 300 Dow points Thursday after Mario Draghi confirmed that he actually is a complete monetary lunatic. And now that the People Printing Press of China has followed suit overnight, they are piling on for more.
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  In fact, Europe is stranded in economic stagnation because statist dirigisme and the massive crush of welfare state taxation and finance have ground enterprise and productivity to a halt. But Draghi says it’s all China’s fault, and that he will fix their dereliction with even more monetary madness:
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  In a news conference, Mr. Draghi stressed the “downside risks” to both economic growth and inflation arising from slowing growth in Chinaand other large developing economies, as well as weak commodity prices.
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  These are the words of a slow-witted man who was born yesterday. That is, they evince an economic model that says every single year, month and day of prior history is irrelevant; and that regardless of how we got to the present moment the answer is always more heavy-handed central bank intrusion in the financial system in order to achieve an utterly bogus 2% inflation target.
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  In fact, the so-called slowdown in China is the best thing that ever happened to Europe, as is the present spot of unusually low consumer inflation. And there is no mystery as to why these things are happening.
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  China and the rest of the world have just come through a mind-bending credit binge which took global debt from $40 trillion in 1994 to $225 trillion at present. China was in the forefront of that binge, sporting a 56X gain in outstanding credit during the same two decade period (from $500 billion in 1995 to $28 trillion at present).
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  In short, Europe, the US, Japan, China and most of the rest of the world is in thrall to a tiny coterie of power-hungry central bankers. If you do not think they are driving the financial system to the mother of all bubble crashes, just ponder the following justification …
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  This is just plain rubbish. These half-baked propositions would have received a falling grade in even a junior college introductory economics course just 20 years ago. So there is no alternative except to take cover because the latest stock market rip is based on pure central bank hopium. 
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  Indeed, Mario Draghi has confirmed once again that the world’s central bankers have a monetary death wish.
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  read more.

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