Guest Post by Karl Denninger
I read this twice before realizing the last name of the author perfectly fit the so-called “fix” for 2008 — and the premise that “they could do that again.”
By the end of the week, stocks, currencies and commodity prices weren’t crashing any longer but financial markets were far from settled. Over the past 10 days, markets have plummeted, paused, recovered and fallen again. There’s little sign the anxiety is lifting.Until recently investors had been preoccupied with the weakness of the post-2008 recovery. Now some are asking whether 2008 might come round again. It’s an especially disturbing possibility because, on the face of it, the policy options for responding to another slump are fewer than last time. Governments have run big budget deficits to support demand, so there’s less so-called fiscal space for a new round of stimulus, or so the thinking goes. Interest rates are still at zero, and even the advocates of quantitative easing recognize that it ran into diminishing returns. What’s left?
Clive goes on to raise the old flag once again; that the “effective remedies” could once again be trotted out.
There’s a problem with this premise: They didn’t work the last time.
My evidence? All of those measures are still in place!
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